Davis Polk discusses Will Anti-Reliance Provisions Preclude Extra-Contractual Fraud Claims? Answers Differ in Delaware, New York, and California

Merger agreements and other complex contracts often contain “anti-reliance” provisions reciting that the representations in the agreement are the sole representations on which the parties relied in entering into the contract. The law regarding the interpretation and enforceability of such clauses—whether in a merger agreement, a settlement agreement, or other commercial contract—varies by jurisdiction, and continues to develop. On November 24, 2015, the Delaware Court of Chancery in Prairie Capital III, L.P. v. Double E Holding Corp.[1] held that, as a matter of Delaware law, there are no “magic words” to disclaim reliance on extrinsic representations. While a standard … Read more