Chancery Upholds Shortened Statute of Limitations (“Survival Clauses”) by Contract

A recent Delaware Court of Chancery opinion is an important tool for the toolbox of corporate and commercial litigators for upholding what the court refers to as “a survival clause”–which provides a contractually shortened period by which claims must be made. HBMA Holdings, LLC v. LSF9 Stardust Holdings LLC, C.A. No. 12806-VCMR (Del. Ch. Dec. 8, 2017). Brief Background:  The facts of this case involved indemnification claims that were based on a contract.  That contract provided that a notice of claims for indemnification needed to be made within 30 days of the matter giving rise to such a claim.  The court found that the notice of claim was not given within that 30-day period. Key Principles:  The court explained that Delaware enforces shortened statute of limitations based on contracts if the period is considered reasonable.  See footnotes 53 and 54.  The court found that a provision in the contract in this case that notice…

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