Recently, Professor Ann Lipton wrote that the California Supreme Court has granted review of EpicentRx, In.c v. Superior Court, 95 Cal. App. 5th 890 (2023), review granted 539 P.3d 118 (2023). This was a case that I discussed last September in which the Court of Appeal held that enforcement of the forum selection clauses in a Delaware corporation’s corporate documents would operate as an implied waiver of the plaintiff's right to a jury trial—a constitutionally-protected right that cannot be waived by contract prior to the commencement of a dispute. Professor Lipton's post focuses on the Court of Appeal's treatment of the certificate of incorporation as a contractual agreement. 

The idea that corporate constituent documents (certificates of incorporation and bylaws) is not new to either the Delaware or California courts. See Airgas, Inc. v. Air Prod. & Chemicals, Inc., 8 A.3d 1182, 1188 (Del. 2010) cited with approval in Bushansky v. Soon-Shiong, 23 Cal. App. 5th 1000, 1005 (2018). See also Wong v. Restoration Robotics, Inc., 78 Cal. App. 5th 48, 61, 293 (2022), review denied (July 27, 2022) (quoting Bushansky).

If charter documents are contracts, they are certainly unusual. A decade ago, for example, I queried if bylaws are contracts, where is the boilerplate? The same question might also be applied to the articles of incorporation. Another question might be whether charter documents fall under the statute of frauds. California's general statute of frauds provides a list of agreements that are invalid "unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent". Cal. Civ. Code § 1624. 

Leaving aside the questions whether charters fall within the categories identified in the statute and whether some exception(s) may be available, there is a question of whether charters are signed by the party to be charged. The California General Corporation Law does require that articles of incorporation be signed, but not by the corporation itself. Cal. Corp. Code § 200. Rather, the statute requires the articles to be signed by the incorporator or the initial directors, if named in the articles. Cf. 8 Del. Code § 103. There is no requirement that the bylaws be signed by the corporation itself, although it is common practice for the corporate secretary to sign an attestation as to their adoption.

If the corporation intends to enforce an article provision against a shareholder and the statute of frauds applies, the question will be whether the shareholder has subscribed to it. In some cases, it may be that a shareholder has signed a separate agreement, such as a subscription or shareholders' agreement, agreeing to be bound by the corporation's articles and bylaws. If not, then enforceability may turn on whether the articles are subject to the statute of frauds.