Chancery Refuses to Enforce Inequitable Windfall Resulting from Illicit Scheme
In Patel v. Dimple, 2007 WL 2353155 (Del. Ch., Aug. 16, 2007), read opinion here, the Chancery Court addressed the situation where both parties had "unclean hands". The court explained that the familiar "unclean hands doctrine", often used as an equitable defense, is not intended to determine "whose hands are dirtier". Rather, the court can use it to avoid assisting parties who schemed to enter into an illicit deal. ( See footnotes 26 to 28). In this case, the parties conspired to enter into an agreement that was designed to skirt the prerequisites--that they otherwise could not satisfy--in order to obtain a license from the applicable state agency to open a liquor store. The court refused to enforce the agreement which would have resulted in rewarding one of the parties to the illicit agreement with a windfall for his misdeed.
