Del. Exclusive Forum Selection Clause Does Not Bind Contracting Party's Managers, Principals, Owners Who Do Not Directly Benefit From Contract
Parties to transaction agreements often choose Delaware as the exclusive forum for disputes arising out of their transactions. This is common, where the parties are from diffuse geographic locations, but desire a single forum well-versed in corporate and commercial law—like Delaware—to resolve their disputes.
May 22, 2024 at 09:00 AM
5 minute read
ContributorsParties to transaction agreements often choose Delaware as the exclusive forum for disputes arising out of their transactions. This is common, where the parties are from diffuse geographic locations, but desire a single forum well-versed in corporate and commercial law—like Delaware—to resolve their disputes. Also common in this setting, is that there are multiple parties involved in a transaction beyond just the business entities, which are the actual parties to the agreement—for example, the managers, principals, or owners of the contracting-entity party to an agreement. If relations between the parties subsequently sour—for instance, where one party believes it was fraudulently induced into entering the transaction—the aggrieved party often targets not only its contractual counterparty, but also the related individuals, who negotiated the agreement.
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