1985)[1] is a landmark decision of the Delaware Supreme Court on corporate defensive tactics against take-over bids.

Until the Unocal decision in 1985, the Delaware courts had applied the business judgment rule, when appropriate, to takeover defenses, mergers, and sales.

The two prongs include: Note that whereas Cheff v. Mathes had sanctioned greenmail, or payment to the raider to go away, in Unocal the court sanctioned reverse greenmail, or payment to shareholders excluding the raider.

[7] As a result, there was a need for "an enhanced duty" on the board, so as to ensure that their decisions in this area were meant only to further the welfare of the corporation and its shareholders.

[8] Therefore, the court ruled that in order for the board to be allotted the protection of the business judgment rule, the board must demonstrate that it was responding to a legitimate threat to corporate policy and effectiveness, and that its actions were "reasonable in relation to the threat posed.