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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
Morris James Blogs
Showing 3 posts in Choice of Law.
Delaware will enforce non-compete agreements against former employees, but generally California law bars such agreements. This decision explains how to determine which state’s law applies by looking to how important is the public policy of each state on the issue before the Court. Because California does enforce a choice of Delaware law when that choice is the subject of negotiation, not coercion, the Delaware choice of law was upheld. Note that under a different California statue then in force, a contrary result was reached in the Ascension Insurance Holdings v.Underwood case.
This decision holds that a contractual provision adopting Delaware law will generally be upheld. However, when applying Delaware law will violate the public policy of another state whose law would have applied but for the contractual choice of law, Delaware will not enforce that choice of law. This distinguishes the Ascension case that declined to apply Delaware law to a non-compete contract that violated California law.
Section 115 of the Delaware General Corporation Law addresses forum selection provisions in corporate charters or bylaws. This decision explains how a contract may also select a forum, how to interpret such a contract and how such contractual provisions may be incorporated into other contracts.