About This Blog
Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
Subscribe to Blog
JDSupra RSS
Join us on LinkedIn
Follow us on TwitterTopics
Top Posts
- Chancery Dismisses Caremark Action Based on Insufficient Allegations of Bad Faith
- Delaware Supreme Court Affirms That the Right to Sue Corporate Officers is Not a “Power” Within the Meaning of DGCL Section 242(b)(2)
- Chancery Denies Attorneys’ Fees for Appointment of New Directors Following Assertion of Derivative Claims
Top News
- February 19, 2021
- October 30, 2020
- April 1, 2024
Archives
Morris James Blogs
Showing 227 posts in Breach of Contract.
Court Of Chancery Clarifies Damages For Breach
Universal Enterprise Group LP v Duncan Petroleum Corporation, C.A. 4948-VCL (July 1, 2013)
This careful decision explains how to calculate damages in a breach of contract case. That is not as easy as it sounds. Plaintiffs frequently try to get tort-type damages in breach of contract cases, particularly under the loss of value theory. This decision cuts off those types of damages.
ShareCourt Of Chancery Explains Exculpation Clause
Anvil Holding Corporation v. Iron Acquisition Corporation, C.A. 7975-VCP (May 17, 2013)
Many acquisition agreements contain provisions that are intended to limit the buyer's remedies. This decision explains what language to use to cut off claims based on extra-contractual representations. The contract must specifically say that there is no reliance on anything outside the terms of the contract.
ShareSupreme Court Sets Reformation Rules
This is an important decision because it sets the rules for when a contract may be reformed for a unilateral mistake. First, it is not a defense to a reformation claim that the other party failed to read the contract. That may be a defense to a rescission claim, but not reformation. Second, a unilateral mistake, known to the other party who remains silent, may justify reformation. Third, the defense of ratification of such a mistake must be based on knowledge of the mistake.
ShareDistrict Court Awards Damages Despite Unenforceable Contract Term
Vici Racing LLC v. T-Mobile USA Inc., Case No. 10-835-SLR (D. Del. February 8, 2013)
This case involves a classic mistake. The contract contained a severability clause that required a court to enforce the contract even if one of its provisions was unenforceable. The Court held that the marketing commitment of key importance to the defendant was not enforceable. But, as a result of the severability clause, the Court enforced the contract in favor of the plaintiff and awarded it damages. Hence, using form contract terms is not a good idea.
ShareCourt Of Chancery Explains Contract Damages
Henkel Corporation v. Innovative Brands Holdings LLC, C.A. 3663-VCN (January 31, 2013)
When a buyer breaches a contract to buy a business, how are the seller's damages to be calculated? This is not as easy as it sounds. For if the seller finds a new buyer and demands damages equal to any dimunition in the sale price, the defaulting buyer will claim the duty to mitigate requires the loss be offset by any income earned prior to the later successful sale. How do you decide what that is? This decision carefully analyzes this issue. The short answer is it depends on the conduct of the parties after the breach.
ShareCourt Of Chancery Explains Reach Of Post Sale Indemnification
Winshall v. Viacom International Inc., C.A. 6074-CS (December 12, 2012)
What claims does an indemnification clause in a sale of a company actually cover? This decision is useful in interpreting a typical indemnification clause to point out that it does not cover future events absent clear language.
Affirmed, Del Supr. 39, 2013 ( October 7, 2013).
ShareCourt Of Chancery Explains Evidence Needed For Reformation
CC Financial LLC v. Wireless Properties LLC, C.A. 5927-VCN (October 1, 2012)
This decision establishes that "clear and convincing" evidence is needed to warrant reformation of a contract for mutual mistake or unilateral mistake coupled with knowing silence.
ShareCourt Of Chancery Applies Relation Back Rule
Central Mortgage Company v. Morgan Stanley Mortgage Capital Holdings LLC, C.A. 5140-CS (August 7, 2012)
When a complaint is amended, the issue sometimes arises whether any new claims relate back to the original filing date so as to avoid the expiration of the statute of limitations. In this decision, the Court explains that when the breach of contract alleged in the amended complaint arises out of different facts and is a different breach than in the original contract, then it does not relate back. Hence, it is a bad idea to wait to amend a complaint.
ShareCourt Of Chancery Explains Laches Defense In Contract Suit
Petroplast Petrofisa Plasticoes S.A. v. Ameron International Group, C.A. 4304-VCP (July 31, 2012)
When is a laches defense available in the Court of Chancery? This decision explains how to figure that out in a breach of contract case.
ShareCourt Of Chancery Holds Individual Buyers Liable For "Corporate" Debt
Envo Inc v. Walters, C.A. 4156-VCP (July 18, 2012)
In this unusual case, the Court of Chancery held individuals liable on a contract that was signed by a corporation. Why? The corporation did not exist. Apparently, the buyers intended to form the entity, but had a fight with their lawyer and never got around to doing the incorporation. While they argued that they had expressly refused to guarantee the contract, the Court held they could not both take the benefits of the deal themselves and then not pay for it. Big surprise!
ShareSuperior Court Explains When a Contract Claim Is Not A Tort
Cornell Glasgow LLC v. La Grange Properties LLC, C.A. N11C-05-016 JRS CCLD (June 6, 2012)
Parties often try to plead as many different legal theories as possible. Pleading tort claims is particularly popular because there is a sense that it may lead to bigger damages and sounds aggressive. After all, who wants to be a "tortfeasor?" This careful decision explains when there is a tort claim and when there is not when the dispute arises out of a contractual relationship.
Briefly, after the contract has been at least partially performed, it is not a tort to promise to continue performance even if you do not mean to do so. Instead, that is just a breach of the contract. Therefore, there is no claim in such circumstances for fraudulent inducement. Also, when the damages arising out of the breach are not different than the damages recoverable in tort, there is no tort claim either.
ShareCourt Of Chancery Upholds Contract As Bar To Estoppel Claim
Blaustein v. Lord Baltimore Capital Corporation, C.A. 6685-VCN (May 31, 2012)
This decision reiterates the settled Delaware law that when a contract deals with the parties' rights on a particular subject, one of the parties can not claim that it entered into the contract based on an oral promise that differs from what the contract provides. After all, if you could do that, then why have the contract in the first place? More ›
ShareCourt Of Chancery Implements The Pharmathene Decision
PharmAthene Inc. v. SIGA Technologies Inc., C.A. 2627-VCP (May 31, 2012)
The original PharmAthene decision is a landmark in the law of remedies for breach of contract because it imposed a form of profit sharing. This latest decision in that case, together with the attached Order, explains in detail how that remedy is to work.
This decision, including its award of expectation damages, was largely affirmed on May 24, 2013. See Del Supr C.A, 314, 2012
ShareCourt Of Chancery Explains Right To Reformation
This is an excellent review of when a contract may be reformed by a court to correct a drafting mistake known by just 1 of the parties who remains silent in the face of the other party's obvious mistake about what the contract says. Reformation is particularly appropriate when there is strong evidence from past dealings over what the parties intended to be in the contract and when the error makes no economic sense.
ShareDelaware Superior Court Instructs How To Raise Choice Of Law
When must a litigant raise any issue over the choice of the law that governs a dispute? Right away is the answer. As this decision correctly holds, if the parties brief their issue under Delaware law, trying to argue later that some other jurisdiction's law applies is too late.
Share
