In United Rentals, Inc. v. RAM Holdings, Inc. (Cerberus ), (Del. Ch., Dec. 21, 2007), read opinion here, the Chancery Court rejected a claim for specific performance in a 68-page opinion that is destined to be a seminal decision on issues of contract interpretation and contract drafting. Even though this post is written on Monday (Christmas Eve), and the decision was issued on Friday, it has already been reviewed and commented on by legal scholars and other commentators, which makes my job easier. Professor Larry Ribstein here, and here, as well as Professors Jeff Lipshaw (here) and Steven Davidoff (here and here) also have provided their analysis. The Wall Street Journal Law Blog has also posted on it here, referring to the colorful opening footnote with the Court’s short lesson in Greek mythology. Much could be written about this opinion, but in light of the foregoing analyses, I will focus on a few procedural highlights.
Among other things, this opinion shows how quickly the Chancery Court, in appropriate circumstances, can schedule a trial and issue a decision involving hundreds of millions of dollars within a few short weeks of the complaint being filed. The complaint in this case was filed, and discovery and a trial took place, as well as a summary judgment motion disposed of (by written decision here), and a final post-trial decision issued, all in about 30 days.
UPDATE: This opinion is a treasure trove of contract interpretation principles, but here is one that is not seen everyday: "the forthright negotiator principle".
The court describes it as providing that: "… in cases where the extrinsic evidence does not lead to a single, commonly held understanding of a contract’s meaning, a court may consider the subjective understanding of one party that has been objectively manifested and is known or should be known by the other party." (See footnote 121). This should not be confused with the separate but also well established principle (as part of the objective theory of contracts that maintains in Delaware), that subjective understandings of a party to a contract (by themselves) which are not communicated to the other party are of no effect. (See footnote 122).
UPDATE II: Here is Professor Bainbridge’s comment on the case.