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Keywords

contractbreach of contractappealmotioncorporation
contractmotion

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Ingres Corp. v. CA, Inc., 8 A.3d 1143

Facts

Ingres Corporation brought a breach of contract action against CA, Inc. in California, alleging that CA had violated their agreements. In response, CA filed a suit in the Delaware Court of Chancery seeking to prevent Ingres from continuing its California action and to enforce obligations under various related contracts, two of which contained forum selection clauses specifying Delaware or New York as the chosen forum. The Court of Chancery denied Ingres's motion to stay the Delaware action, concluding that the forum selection clauses were binding and applicable to the dispute.

CA filed this action against Ingres in the Delaware Court of Chancery, requesting preliminary and permanent injunctive relief that would prevent Ingres from prosecuting the California Action and require Ingres to perform its obligations under various contracts, which addressed related subjects.

Issue

Did the Court of Chancery err in denying Ingres's motion to stay the action in favor of the California Action, given that one of the agreements did not contain an express forum selection clause?

But in denying Ingres' motion to stay, the Court of Chancery explained that in determining which contracts governed the various disputes, the court must consider the entire collection of related contracts, including those that contained forum selection clauses specifying Delaware or New York courts as the chosen forum.

Rule

Where contracting parties have expressly agreed upon a legally enforceable forum selection clause, a court should honor the parties' contract and enforce the clause, even if the McWane principle might otherwise require a different result.

Consistent with the ruling of the United States Supreme Court in M/S Bremen v. Zapata Off–Shore Co., we hold that where contracting parties have expressly agreed upon a legally enforceable forum selection clause, a court should honor the parties' contract and enforce the clause, even if, absent any forum selection clause, the McWane principle might otherwise require a different result.

Analysis

The Court of Chancery analyzed the entire collection of related contracts between Ingres and CA, determining that the agreement lacking a forum selection clause did not supersede those that did. The court emphasized that Ingres had agreed to adjudicate all claims related to the agreements in a specific forum, and thus, it enforced the forum selection clauses, concluding that Ingres's appeal lacked merit.

The Court of Chancery carefully considered the parties' contractual agreements and enforced the forum selection clause included therein. Ingres has not shown that the clause was unreasonable, unjust, or otherwise invalid.

Conclusion

The Supreme Court affirmed the decision of the Court of Chancery, holding that the contract between the software companies that did not contain an express forum selection clause did not supersede those contracts that did. The judgment of the Court of Chancery is affirmed.

The judgment of the Court of Chancery is AFFIRMED.

Who won?

CA, Inc. prevailed in the case because the court upheld the forum selection clauses in the contracts, enforcing the parties' agreement to litigate in Delaware despite Ingres's claims.

CA, Inc. prevailed in the case because the court upheld the forum selection clauses in the contracts, enforcing the parties' agreement to litigate in Delaware despite Ingres's claims.

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