News & Analysis as of

Breach of Contract Corporate Sales Transactions

Hogan Lovells

Sudden breach of a contract and liability: key takeaways from the Altarea’s court decision (TAE Feb. 4, 2025, no. J2024000206)

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A out of the ordinary case: a breach of contract for the sale of a business (rather than the breakdown of negotiations), and more specifically for the transfer of control of the Primonial Group. Back in March 2022, the...more

Jones Day

Earnouts in M&A Transactions: Recent Decisions From Delaware

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In 2024, Delaware courts issued multiple instructive decisions on earnout provisions in life sciences M&A transactions. ...more

Hogan Lovells

English High Court considers material adverse effect clause in SPA: the “revelatory event”

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Cases on Material Adverse Effect (“MAE”) clauses (also known as Material Adverse Change, or MAC, clauses) rarely come before the English courts, so there are limited English authorities on their construction. The High Court...more

Mayer Brown

Delaware Law Alert: Efforts Standards in Life-Sciences Earnout Provisions

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In two significant recent opinions, the Delaware Chancery Court ruled against the buyers of life sciences companies, holding that they failed to apply commercially reasonable efforts to achieve earnout milestones. In Fortis...more

DarrowEverett LLP

UCC Article 2: Because Even Your Toaster Deserves a Fair Contract

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The Uniform Commercial Code (“UCC”) is a comprehensive set of laws governing commercial transactions. It was designed and drafted with the aim of standardizing, harmonizing, and simplifying the laws around commercial...more

A&O Shearman

Delaware Court Of Chancery Dismisses Breach Of Contract Claims Against Buyer, Finding Seller Retained Post-Closing Liability...

A&O Shearman on

On April 3, 2023, Vice Chancellor Nathan A. Cook of the Delaware Chancery Court dismissed the breach of contract claims by one pharmaceutical company (the “Seller”) against another (the “Buyer”) in connection with the Buyer’s...more

Robson & Robson, P.C.

Sellers Beware: Sandbaggers Welcomed In Pennsylvania & Delaware

Robson & Robson, P.C. on

Image a home buyer finally finds their dream house. There’s just one problem. During their home inspection, they discover the foundation is cracked. But they buy the house anyway, fully aware of the issues with the...more

Wyrick Robbins Yates & Ponton LLP

Yonder Window Breaks: Earnout Covenants in Acquisitions

Earnouts, which provide sellers payouts if certain post-closing milestones are reached, have become increasingly popular in recent M&A transactions given today’s uncertain regulatory and financial climate.  Inflation, supply...more

Goulston & Storrs PC

Exclusion of Consequential Damages (UPDATED)

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Market Trends: What You Need to Know - As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Points Studies: In 2021, 10% of the merger and acquisition purchase agreements covered by...more

Gray Reed

Delaware Court Provides Clarity Regarding Anti-Bootstrapping Rule

Gray Reed on

On January 27, 2022, in Levy Family Investors, LLC v. Oars + Alps LLC the Delaware Court of Chancery (the “Court”) released a memorandum opinion providing clarity with regard to Delaware’s infamous “Anti-Bootstrapping Rule”...more

Gray Reed

Delaware: A Confirmed Pro-Sandbagging Jurisdiction

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In an opinion of significance to M&A Practitioners, the Delaware Court of Chancery recently made it clear that Delaware law allows a buyer in an acquisition to “sandbag” a seller if the acquisition agreement allows for...more

Jones Day

Delaware Court Holds That Delaware "Should Be a Pro-Sandbagging Jurisdiction"

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On March 9, 2022, the Delaware Court of Chancery issued a post-trial decision in Arwood v. AW Site Services, LLC, subsequently amended on March 24, 2022. The plaintiff, John Arwood, had spent decades building a waste...more

Jones Day

COVID-19 and Merger Litigation: Takeaways After Two Years

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Before the pandemic, it was generally accepted that establishing an MAE was very difficult—indeed, only one case in Delaware, 2018's Akorn v. Fresenius Kabi, had ever found that an MAE occurred. Following the pandemic, this...more

Stikeman Elliott LLP

“Commercially Reasonable Best Efforts”: B.C. Court Provides Guidance in Context of Purchase and Sale Contract

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In Sutter Hill Management Corporation v. Mpire Capital Corporation (Sutter), the British Columbia Court of Appeal found that the acquiror of an Abbotsford, B.C. care home had breached the purchase and sale agreement by...more

Farrell Fritz, P.C.

Course Correction: Why “Ordinary Course” Covenants in Acquisition Agreements Should be Drafted Carefully

Farrell Fritz, P.C. on

Should a buyer be allowed to walk away from an acquisition if an extraordinary event occurs between signing and closing that forces the target company to take emergency remedial measures outside its ordinary course, even if...more

Farrell Fritz, P.C.

Defendants Get Lit Up by the Court on the Fifth Day of Hanukkah

Farrell Fritz, P.C. on

It’s not often that a lawsuit in the Commercial Division between sophisticated parties to an arm’s-length business transaction warrants a blistering rebuke of the parties by the Court....more

Stinson - Corporate & Securities Law Blog

Minnesota Court Finds Structuring of Sale Transaction Did Not Violate Duty of Good Faith and Fair Dealing

The United States District Court for the District of Minnesota decided a case where Plaintiff was a limited partner in an entity where the partnership interests were the subject of a Purchase Agreement entered into by the...more

Stinson - Corporate & Securities Law Blog

Buyer Potentially Liable for Earnout Even Though it had Right to Operate Target in its Discretion

In Shareholder Representative Services LLC v Albertsons Companies, Inc., the aggrieved former shareholders of DineInFresh, Inc., d/b/a Plated, sought recovery of earnout consideration from Plated’s acquirer, Defendant,...more

Goulston & Storrs PC

Exclusion of Consequential Damages

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Market Trends: - What You Need to Know As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Point Studies... Originally Published in Bloomberg Law - April 2021....more

Stinson - Corporate & Securities Law Blog

Court Finds Buyer is not Required to Return Cash in Purported “Cash Free, Debt Free” Deal

Deluxe Entertainment Services Inc. v. DLX Acquisition Corporation involved a stock purchase agreement where Plaintiff Deluxe Entertainment sold all of its stock (the “Transaction”) in its wholly owned subsidiary, Deluxe Media...more

Gray Reed

Delaware Superior Court Holds Indemnification Provision Does Not Cover First-Party Claims for Legal Fees

Gray Reed on

In Ashland LLC v. Samuel J. Heyman 1981 Continuing Trust for Lazarus S. Heyman (Del. Super. Ct. Nov. 10, 2020), the Complex Commercial Litigation Division of the Delaware Superior Court held that parties to a contract are...more

Goulston & Storrs PC

The ‘Materiality Scrape’ Provision What’s Market?

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Market Trends: What You Need to Know - Over the past almost 15 years covered by the ABA studies, materiality scrapes have morphed from being a somewhat uncommon provision, seen in about 14% of transactions in 2005, to...more

Carlton Fields

Damages for Reps and Warranties Breaches

Carlton Fields on

When one party to an M&A agreement alleges that the other breached its representations and warranties, the damages analysis can be complex, depending on the terms of the agreement. Generally, a claim for indemnification due...more

Carlton Fields

The Perils of Using Baseball Arbitration to Resolve RWI Policy Disputes

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In the world of M&A and private equity deals, buyer-side representation and warranties insurance (RWI) transfers the risk of a seller’s representation to an insurer. To adequately safeguard the insurer, it therefore becomes...more

Carlton Fields

The Impact of the Duty to Mitigate on Diminution of Value Claims

Carlton Fields on

Buyers in M&A deals often contend that they value a target company based on the seller’s representations and warranties. If the buyer later determines those representations and warranties were false, it may argue that, as a...more

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