Contract Interpretation: Specific Term Prevails Over General

The Delaware Supreme Court, in DCV Holdings, Inc. v. Conagra, Inc., download file, reviewed a trial court ruling on claims that the seller should be responsible for antitrust violations and other claims that arose after the closing, based on allegations of common law fraud, as well as the indemnification clause in the agreement of sale. The court reviewed the elements of common law fraud, which it found were not met, reviewed the terms of the contract, and relied on the basic principle of contract interpretation that the more specific parts of a contract prevail over more general language. The court found that the seller specifically negotiated for a “knowledge qualifier” that limited its liability for those matters which it was unaware of at the time of the sale, in connection with its indemnification obligations. In upholding the trial court, the Supreme Court reviewed the standard for review of factual determinations and also noted that its review of the trial court’s application of law to factual determinations is de novo.