Let’s Start at the Very Beginning: Delaware Supreme Court Reaffirms That Consideration for Restrictive Covenants Is Measured at Contract Formation, Not Time of Enforcement
On February 3, 2026, the Delaware Supreme Court issued a short but highly anticipated order in North American Fire Ultimate Holdings, LP v. Doorly, reversing the Chancery Court’s dismissal of contract claims seeking to enforce restrictive covenants against a former senior executive. The decision clarifies that the existence of consideration supporting restrictive covenants must be evaluated at the time the parties enter into their agreement—not at the time of an alleged…

