Chapter 11, Problem 2CT

Summary Introduction

Case s ummary : P Incorporation, on the behalf of M, signed a subscription agreement to buy the stock of the company CC with the company C, which acted on its behalf. The agreement states that the state court of Delaware shall exercise exclusive jurisdiction over any action concerning the subscription agreement. When the cash reserves of CC depleted due to the financial crisis that further led to liquidation, the company M held CC liable for all the incurred damages. The company C filed a case against the company P for the enforcement of the forum selection clause.

To find: The bindings of the company P to the forum selection clause if the company P had signed the agreement of subscription as the director of M without any other relation to the agreement.