Words matter. A lot. Especially in legal documents, like contracts. The Delaware Superior Court recently addressed this issue in a case in which a business buyer was trying to get remedies from the seller that weren’t outlined in their agreement, according to Christopher Austin and Mitchell Lowenthal of Cleary Gottlieb Steen & Hamilton.
At issue was whether it was the buyer or the seller having the pay an earn-out liability to shareholders, explain the authors. The buyer alleged that during negotiations, the seller had made a fraudulent promise with respect to the liability. When analyzing the written agreement, the judge noted the relevant provisions, “did not include a specific acknowledgement that the buyer did not rely on any representations or statements other than those expressly set forth in the purchase agreement,” say Austin and Lowenthal. They go on to note that in past cases, this non-reliance clause is necessary.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
