I once wrote:
The nexus of contracts model has important implications for a range of corporate law topics, the most obvious of which is the debate over the proper role of mandatory legal rules. As a positive matter, contractarians contend that corporate law in fact is generally comprised of default rules, from which shareholders are free to depart, rather than mandatory rules. As a normative matter, contractarians argue that this is just as it should be. …
[Some reject] the positive contractarian story on grounds that corporate law is pervaded by mandatory rules. But this objection is far from fatal. In the first instance, most contractarians probably regard the normative story as being the more important of the two. As such, we cheerfully concede the existence of mandatory rules, while deploring that unfortunate fact.
Community and Statism: A Conservative Contractarian Critique of Progressive Corporate Law Scholarship, 82 Cornell Law Review 856 (1997).
Unfortunately, the Delaware Chancery Court's recent decision in Sutherland v. Sutherland, 2009 WL 750287, rejected the proposition that freedom of contract prevails in corporate law, as it does in partnership and LLC law:
While such a provision is permissible under the Delaware Limited Liability Company Act and the Delaware Revised Uniform Limited Partnership Act, where freedom of contract is the guiding and overriding principle, it is expressly forbidden by the DGCL.
As Larry Ribstein points out, in a post you should go read in full:
In corporations, freedom of contract is not, by negative implication, the "guiding and overriding principle."
As per my prior writings, I hereby deplore that unfortunate fact.
