Delaware entities have the contractual freedom to shorten the statute of limitations through the adoption of a survival clause in a stock purchase agreement, the Court of Chancery has ruled. The court issued the opinion when it granted ENI Holdings LLC’s motion to dismiss certain counterclaims alleged against the company by KBR Group Holdings LLC over the $280 million sale of engineering firm Roberts & Schaefer Co.
“Parties to contracts, however, may weigh the interests addressed by statute differently when it comes to the particular circumstances of their agreement,” Vice Chancellor Sam Glasscock III said in ENI Holdings v. KBR Group Holdings. “Those parties, it is clear, are in a better position than legislators to know what result is called for by those circumstances peculiar to their relationship. For that reason, and because this jurisdiction respects the right to contract in general, Delaware recognizes the right of contracting parties to impose a shorter period of limitation than provided for by the statute.”
