Legal Question in Business Law in California

Re: Corporate Suspension v. Contracts

It depends on the terms of the contract, but I doubt it. Since the CA business was acting as if the contract was in force, since you both have substantially affirmed the contract by action, and since you corrected the issue... I don't see a strong claim by the opposing company.

Re: Corporate Suspension v. Contracts

The situation and therefore the answer is mildly complex.

First I'm going to make an assumption that Delaware law applies to the suspension and the revivor, but that California law applies to the specific matter of the validity of the contract. I think this is a correct assumption but if you were my client I'd have to research it to be sure.

California would recognize the Delaware suspension and treat the corporation just as though it were a suspended California corporation.

The contract isn't void; it is, however, probably voidable at the election of the other party. It can choose to enforce the contract against the revived corporation, or to rescind.

However, if it elects to rescind, the other party can't just do this by clapping its hands and saying "I rescind thee" three times. It can only rescind by judicial process (e.g., suit to rescind the contract). Such relief cannot be granted unless (i) the corporation was allowed a �reasonable opportunity� to obtain revivor; and (ii) the corporation receives full restitution of benefits conferred by it under the contract. See California Revenue & Taxation Code sections 23304.5 and 23305a.

I can see a possible scenario where you bring suit to enforce the contract or recover damages for its breach, and the other party cross-complains for rescission -- that is, if their attorney is aware of the law. Otherwise, they might just choose to defend on the theory that the contract is void, which it isn't.