The Delaware Supreme Court’s decision in Thompson Street Capital Partners, IV, LLP v. Sonova United States Hearing Instruments, LLC, No. 168, 224 (Del. April 28, 2025), reversed the dismissal of the claim of a seller challenging the compliance by a buyer with a contractual notice provision.

The high court found that the trial court should not have dismissed the suit against the buyer based on the claim that the buyer failed to provide adequate notice of indemnification claims which would have provided access to funds in an escrow agreement that required a specific form of notice with “reasonable details.” The Delaware Supreme Court determined that a remand was necessary for the trial court to examine whether non-compliance of the notice provision should be excused because it would result in a disproportionate forfeiture. Under the law, including Delaware, forfeitures are disfavored.