Delaware Chancery Court Allows Fraud Claim to Proceed Based on Extracontractual Statements in the Absence of a Nonreliance Clause.

The Delaware Court of Chancery allowed a fraud claim to proceed in a case involving promises made by a buyer regarding earn-out provisions in an acquisition. WCG Clinical Services acquired Trifecta Multimedia Holdings, and when Trifecta failed to reach certain performance milestones, they claimed fraudulent inducement and breach of the implied covenant of good faith and fair dealing. The court dismissed certain statements made during negotiations as puffery, but found that other actions contradicted material representations made during negotiations, satisfying the intent element of fraud. The court also clarified that explicit and unambiguous nonreliance language is required to bar a fraud claim. However, the court dismissed the breach of the implied covenant claim, stating that the parties mutually agreed not to include the requirement in the agreement. [Extracted from the article]