In Rossi v. Ricks, 2008 WL 3021033 (Del. Ch., Aug. 1, 2008), read opinion here, the Delaware Chancery Court reiterates basic contract interpretation principles as well as the policy underpinnings for the objective theory of contract, including refusal to allow extrinsic evidence if the agreement is ambigous–and just because the parties have two different views of what the agreement means does NOT make it ambiguous.
One especially notable point about this otherwise pedestrian case is a footnote that refers to The Deal.com for a recent article that reports on an impact the Chancery Court’s opinions are having on M & A lawyers. Footnote 12 provides as follows:
Cf. David Marcus, Desperately Seeking Certainty, THEDEAL.COM, July 18, 2008, at http://www.thedeal.com/newsweekly/features/desperately-seeking-certainty.php (noting that M & A lawyers have shifted their practice to emphasize contractual clarity in private equity deals in response to decisions of this Court).
The reference article quoted from the United Rental, Inc. v. Cerberus case (summarized here) for a relatively little known contract rule, called the: "forthright negotiator principle," under which … "the subjective understanding of one party to a contract may bind the other party when the other party knows or has reason to know of that understanding."