Written by attorneys · grounded in primary & secondary sources — see below
The period during which an elected officer or appointee may hold office, perform its functions, and enjoy its privileges and emoluments. Shareholder agreements in closely held corporations may validly fix the length of that period for directors and officers even when the agreement conflicts with default bylaws or statutes.
Sources & Authorities
How it applies
Common Examples
6
Shareholder Agreement Fixes Director Terms
Tabitha Taylor and Theo Thomas, the sole shareholders of Titan Industries, signed a written agreement delivered to the corporation that named Taylor as the sole director for a five-year term removable only by unanimous consent. When new shareholder Travis Tate later sought to remove Taylor under the annual-election bylaws, the court enforced the agreement. Taylor remained in office for the full five-year period because the agreement validly established the term of office.
Stockholders Cannot Bind Future Directors
Tonya Takahashi and Thaddeus Tran pooled their majority shares in True North Logistics to elect three directors under a side agreement that required the directors to follow a specific business policy. After the directors took office they refused to follow the policy, citing their independent judgment. The court held that the agreement could not control the directors' actions during their term of office.
Select any source to read its text and confirm it supports the definition.
Statutes
Model Codes
Dictionaries
McQuade v. Stoneham263 N.Y. 323, 189 N.E. 234 (1934)
Legislative Districts and Two-Year Terms
Tobias Thomas challenged Tennessee's legislative map, arguing that the two-year term of office for House members under the state constitution required equal population districts to protect voters' rights. The Court held that the claim presented a justiciable question about how the term of office interacts with equal representation. The case proceeded to trial on the apportionment issue.
Baker v. Carr369 U.S. 186, 211
States Cannot Add Term Limits
Travis Tate, an Arkansas voter, sued to enforce a state constitutional amendment that barred congressional candidates from appearing on the ballot after serving a set number of terms. The Court ruled that the amendment impermissibly added qualifications beyond those in the Constitution for the term of office. The state provision was struck down.
United States Term Limits v. Thornton514 U.S. 779, 838 (1995)
FEC Commissioners' Staggered Terms
Tabitha Taylor challenged the appointment process for Federal Election Commission members, arguing that the six-year term of office and staggered structure violated separation-of-powers principles. The Court upheld the statutory scheme that fixes the term length and requires bipartisan appointment. The commissioners remained in office for their full statutory terms.
Buckley v. Valeo424 U.S. 1, 93 (1976)
Private Suit During Presidential Term
Paula Corbin Jones sued President William Jefferson Clinton for pre-office conduct while he remained in the White House. The Court held that the ongoing term of office did not confer immunity from civil suits based on unofficial acts. The litigation could proceed without waiting for the term to end.
William Jefferson Clinton v. Paula Corbin Jones520 U.S. 681, 117 S. Ct. 1636, 137 L. Ed. 2d 945 (1997)
Common questions
Frequently Asked
4
Can a shareholder agreement validly set the length of a director's term of office?+
Yes. Under Model Business Corporation Act § 7.32(a)(3), shareholders may enter a written agreement that establishes directors' or officers' terms of office even if the agreement conflicts with the bylaws or default statutory rules, provided all current shareholders sign and the agreement is made known to the corporation.
Supporting sources
Does a later staggered-board amendment automatically lengthen an existing one-year director term?+
No. When a director is elected to a one-year term under a non-staggered board, that term expires at the next annual meeting. A subsequent charter amendment creating a staggered board applies only to future elections and does not retroactively extend the sitting director's term of office.
Supporting sources
What happens if a new shareholder buys shares without notice of an existing term-of-office agreement?+
The agreement remains valid and enforceable against the corporation and original signatories. The purchaser may rescind the purchase if the agreement was not noted on the certificate, but the term-of-office provisions continue to bind those who signed the agreement.
Supporting sources
Does presidential immunity bar all civil suits while the President is in office?+
No. Immunity protects only official acts within the outer perimeter of presidential duties. Suits based on private conduct that occurred before the term of office began may proceed during the term, subject to ordinary case-management tools.
Supporting sources
424 U.S. 1 (1976)Legislation and Regulation
…to matters of national or State policy or concern. § 437c. Federal Election Commission. (a) Establishment; membership; term of office; vacancies; qualifications; compensation; chairman and vice chairman. (1) There is established a commission to be known as the Federal Election Commission. The Commission is composed of…