anti-reliance clause in Delaware

2025This is an inconsequential distinction because the SPA’s anti-reliance clause independently bars Count III, which is based on “Sellers [allegedly] [] material misrepresentations and omissions” made “[p]rior to the execution of the [SPA].” Compl. ¶¶ 62-68; see SPA § 5.7 (“irrevocably disclaim[ing] . . . rel[iance] upon any [] [] representations or warranties” “other than the representations and warranties set forth in ARTICLE 4[.]”); Kronenberg v. Katz, 872 A.2d 568, 593 (Del.

2019For an anti-reliance defense to succeed, the contract “must contain language that, when read together, can be said to add up to a clear anti-reliance clause by which the plaintiff has contractually promised that it did not rely upon statements outside the contract’s four corners in deciding to sign the contract.” Kronenberg v. Katz, 872 A.2d 568, 593 (Del.

2026In Abry, a sophisticated private-equity buyer sought to rescind a $500 million stock purchase agreement based on alleged contractual fraud.250 The agreement contained both (i) an exclusive remedy provision that limited the buyer to indemnification claims, and (ii) an anti-reliance clause in which the buyer agreed that it was relying only on 248 Merger Agreement § 4.08 (emphasis added). 249 Motion to Dismiss Opinion at 29 (“Unlike the parties in Abry Partners, Auris did not disclaim reliance on extra-contractual statement anywhere in the Merger Agreement.”). 250 Abry, 891 A.2d at 1046–47 (where

2026Ch. 2006). 18 that [they] did not rely upon statements outside the contract’s four corners in deciding to sign the contract.’”83 Thus, “‘standard integration clauses without explicit anti-reliance representations, will not relieve a party of its oral and extra- contractual fraudulent representations.’”84 Even absent an anti-reliance clause, the parol evidence rule will preclude a fraud claim where the extracontractual representation directly conflicts with express contractual language.85 Put another way, an integration clause does not bar reliance on misrepresentations outside the four corners

2021Corp., 2020 WL 5015863 , at *10 (quoting Prairie Cap., 132 A.3d at 49–59 (analyzing the effect of an anti-reliance clause and holding that the fraud claim “largely survives at the pleading stage to the extent that [plaintiff] relies on representations in the SPA”), and citing ChyronHego Corp. v. Wight, 2018 WL 3642132 , at *4–8 (Del.

2021July 31, 2018) (holding that an anti-reliance clause did not bar a fraud claim based on a representation in the contract)). 56 Prairie Cap., 132 A.3d at 52 . 16 “rel[y] on representations and warranties.”57 The Complaint includes detailed factual allegations that give rise to the reasonable inference that Sellers knowingly misrepresented information about the Company’s finances and accounting practices that were the subject of Sellers’ representations and warranties.58 And to the extent Plaintiffs’ fraud claims rely on “extra-contractual” statements, they “may use external sources of informati

2020The Prairie Capital Court disagreed with the TransDigm Court’s 36 9013 WL 2326881 , at *7. 37 Td. at *9, 38 7d. (citing RAA, 45 A.3d 107 ; In re IBP, 789 A.2d 14 ; Great Lakes 788 A.2d 544 ). 18 reasoning that a clause must expressly refer to omissions in order to bar a fraudulent omissions claim.*?

2015Moreover, ITW warranted in the anti- reliance clause that it is “a sophisticated entity familiar with transactions similar to those contemplated by [the SPSA].” 116 RAA Management makes clear that the SPSA’s anti-reliance clause is enforceable to bar ITW’s claim for fraud based on extra-contractual statements. 117 115 Id. at 117 . 116 Defs.’ Op. Br., Ex. 1 SPSA § 4.8(iv). 117 Moreover, in ABRY Partners the Court of Chancery stated that when confronted with such an argument (as that asserted by ITW), public policy favors enforcement of the anti-reliance clause.

2015Thus, ITW could not have justifiably relied on any statements made by the Individual Defendants that were outside of the SPSA. 120 Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 1208 (Del. 1993). 121 Defs.’ Op. Br., Ex. 1 SPSA § 4.8. 122 Id. 27 The crux of ITW’s argument is that the Complaint adequately alleges claims for fraud against the Individual Defendants because the Individual Defendants allegedly knew that Section 2.8 of the SPSA regarding Brooks’ November 2011 balance sheet was false or that the representations were made with reckless indiffere