Regulatory Competition and Freedom of Contract in U.S. Corporate Law

Abstract

The real dynamics of U.S. regulatory competition in corporate law are often misunderstood. As convincingly demonstrated by some authors (Kahan and Kamar), most States are not actively engaged in the market for charters, and Delaware's position is substantially unchallenged. From this starting point, in this short paper presented at the Conference of the Sixtieth Anniversary of the Italian Rivista delle societa in 2015, after a brief critical discussion of the actual nature of this "competition" based also on empirical evidence, I examine some recent reforms of the Delaware General Corporation Act in the area of corporate litigation (on fee-shifting bylaws and exclusive forum selection clauses), which affect contractual freedom in corporate bylaws and seem to confirm the theoretical framework illustrated. In light of these results, I offer some implications for the also peculiar type of regulatory competition emerging in Europe, and indicate some consequences that European policy makers should take into account.