Showing 7 posts in Fraud.
Superior Court Allows Fraudulent Inducement and Breach of Contract Claims to Proceed in Parallel Based on Rescissory Damages Request
Firmenich Inc. v. Natural Flavors, Inc., C.A. No. N19C-01-320 MMJ [CCLD] (Del. Super. Apr. 7, 2020).
Fraud claims that overlap with breach of contract claims often are subject to dismissal under Delaware law. Sometimes, however, fraud and contract claims may proceed in parallel, as the Complex Commercial Litigation Division of the Superior Court determined in Natural Flavors. Here, the Superior Court declined to dismiss a fraudulent inducement claim seeking rescissory damages notwithstanding an alternatively-pled breach of contract claim. The litigation concerned an Asset Purchase Agreement and allegations of fraud arising from a former employee’s whistleblowing. After the plaintiff-buyer’s initial fraud claim was dismissed as impermissibly bootstrapped to its breach of contract claim, the plaintiff filed an amended complaint for rescissory damages as compensation for alleged fraudulent inducement to enter into the APA, while alternatively seeking relief for alleged breach of the APA. The defendant-seller, again, sought dismissal of the fraud claim as duplicative of the breach of contract count. More ›
Superior Court CCLD Addresses Pleading Standards for Trade Secret, Fraud and Implied Covenant Claims
Brightstar and PCS, two competitors that distribute new and pre-owned mobile devices, entered into a buy/sell agreement as part of negotiations for a proposed merger and strategic alliance. Under the buy/sell agreement, PCS purchased mobile devices from Brightstar for re-sale to third parties and was subject to a non-circumvention provision that restricted PCS from purchasing these devices from certain other suppliers. After their merger discussions faltered, PCS terminated the agreement, and Brightstar brought suit for unpaid amounts and alleged misappropriation of pricing information. PCS counterclaimed for, inter alia, fraud and breach of the implied covenant of good faith and fair dealing. More ›Share
This opinion decides a motion to dismiss fraud and related tort claims arising out of various investments against a former director and CEO and an employee of a controlling stockholder.
When the investments turned out to be worthless, the plaintiff investor brought suit for breach of fiduciary duties and common law fraud arising from information that the investor received before investing in a company controlled by a business colleague and friend. More ›Share
This decision explains when a fraud claim survives a motion to dismiss that is based on the argument that an integration clause in a contract precludes reliance on extra contractual representations. The short answer is that the contract must specifically deny reliance on those statements before the fraud claim is precluded.Share
One of the more often litigated questions in Delaware is whether an integration or anti-reliance clause in an agreement bars claims for fraud based on alleged misrepresentations outside of those in the contract itself. This decision harmonizes the extensive case law on that subject. It also is useful in deciding when the actual representations in the agreement are sufficient to support a claim of fraud.Share
This is an interesting decision because it explains: (1) when a fraud claim may be brought despite anti-reliance provisions in a contract and (2) when a fraud claim does not overlap and is thereby precluded by a contract claim based on similar facts. In each case, the inquiry is very fact specific.Share
This decision explains what needs to be alleged to state a fraud claim. More particularly, it is not enough to just generally allege that a defendant must have had knowledge of someone else’s false statement.Share