Publications

In their Corporate Litigation column published in the New York Law Journal, Joe McLaughlin and Yafit Cohn write about the enforceability of “non-reliance provisions” in acquisition agreements, in which a buyer represents that it has made its investment decisions based on its own knowledge and independent investigation – without regard to anything the seller has said or has not said – or that the buyer only relied on the specific representations contained in the parties’ definitive agreement. The column examines a recent decision from the Delaware Court of Chancery in Prairie Capital III v. Double E Holding Corp, which reinforces that a clear non-reliance provision, coupled with an integration clause, should bar fraud claims based on extra-contractual representations (including omission claims). The decision also rejects suggestions in prior decisions that specific “magic words” are required to make a provision disclaiming reliance on representations outside a final agreement enforceable under Delaware law.  The key to enforcement, the court said, is that the contract language “add up to a clear anti-reliance clause.”