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Court Of Chancery Limits Implied Covenant Claims

Fortis Advisors LLC v. Dialog Semiconductor PLC, C.A. 9522-CB (January 30, 2015) When a contract spells out that  its obligations are to be carried out in a "commercially reasonable best efforts" manner, it will be harder to argue there is any gap that the covenant of good faith and fair dealing may fill.   That means the claim based on the implied covenant may be dismissed leaving the court to ponder what is "commercially reasonable."  This decision needs to be read in conjunction with The Renco Group Inc. v. MacAndrews AMG Holdings LLC, C.A. 7668-VCN (January 29, 2015) upholding a similar claim. Share


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