January 12, 2017
Practice Point: Disclaimers of Reliance in M&A Contracts
This Morris James blog reviews Delaware case law on disclaimers of reliance in acquisition agreements & raises an important practice point. As this excerpt notes, a clause that specifically disclaims reliance on any extra-contractual statements is preferable to one that simply states what the buyer relied upon:
IAC Search found that a disclaimer or anti-reliance clause that states affirmatively what the buyer relied upon in entering into a purchase agreement, together with a standard integration clause, is sufficient to bar a fraud claim based on extra-contractual representations. The safer course of action to preclude a claim for fraud, however, is to include both an integration clause and an anti-reliance clause that expressly states that the buyer did not rely upon any extra-contractual statements or information outside of the purchase agreement in its decision to enter into the agreement.
– John Jenkins