Delaware Business Litigation Report

Court Of Chancery Upholds Exclusive Remedy Clause

PR Acquisitions LLC v. Midland Funding LLC, C.A. 2017-0465-TMR (April 30, 2018)

This is an important decision because it teaches two important lessons. First, when an asset sale agreement contains explicit requirements on how to give notice of a claim on an escrow account, those requirements must be followed or the claim will be waived. Second, absent fraud, a contractual provision will be enforced that provides that the exclusive remedy for a buyer is a claim on an escrow fund. Thus, for example, a separate breach of contract or negligent representation claim will be dismissed.

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