In Plaze, Inc. v. Callas, C.A. No. 2018-0721-TMZ (Feb. 28, 2019), a buyer bought a corporation from a seller but not the production facilities. The buyer instead leased the production facilities from a lessor that was owned and controlled by the seller. Later, the lessor sued the buyer/lessee for violations of the leases in a Georgia state court. The seller was not a party in the Georgia action. The lease did not contain a forum-selection clause. However, the buyer/lessee sought preliminary injunction in the Delaware Chancery Court against the action in Georgia based on a forum-selection clause in the stock purchase agreement. The stock purchase agreement provided that the “Parties” agreed to submit to the jurisdiction of the Delaware courts in relation to litigations “arising out of or relating to” the sale of the corporation. Yet, even though the lessor was one of the signatories and had other obligations under the stock purchase agreement, it was not included in the definition of the “Parties”.
The Court held that the stock purchase agreement’s forum-selection clause did not bind the lessor. This was consistent with the stock purchase agreement’s contractual scheme to limit the lessor’s obligations and the lease’s inferred expectation for litigations in Georgia. Furthermore, the single agreement theory did not apply since none of the contracts required the lessor to litigate exclusively in a particular state.
BOTTOM LINE: Make sure you define all parties and their respective obligations under an agreement.