A recent case from the Delaware Supreme Court, Leaf Invenergy v. Invenergy Renewables, C.A. No. 208, 2018, serves as a firm reminder of the importance of expectations in deal-making. Delaware courts will enforce the terms of well-drafted, unambiguous contracts. Clearly communicating and memorializing parties’ expectations in the terms of their contract puts parties in the best position possible to have their expectations enforced and receive the benefit of their bargain. The steep increase from the $1 in nominal damages awarded by the Delaware Court of Chancery to the $126 million damages award granted by the Supreme Court clearly illustrates how critical these drafting decisions can be.

The Parties’ Dispute

The parties’ relationship began in 2008, when Leaf Clean Energy Co. (Leaf Parent), through plaintiff-appellant Leaf Invenergy Co. (Leaf), invested $30 million in a Series B investment round for defendant-appellee Invenergy Wind, a wind energy developer. The Series B notes that Leaf received in return for the investment were governed by the “Series B note agreement,” and, among other things, that agreement gave Leaf the right to convert its notes into equity subject to the “Series B LLC agreement” that would be executed by it and Invenergy upon conversion.

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