A noteworthy opinion by the Delaware Court of Chancery should be read by all those who need to be, or should be, concerned about the latest iterations of Delaware law that elucidate the circumstances in which:
(1) a director may be exposed to personal liability even when ostensibly acting on behalf of a corporation in her official corporate capacity, for example, when signing a document as a corporate officer;
(2) Delaware courts will enforce a provision in an agreement that expressly states that:
(a) the parties are not relying on any statements (or omissions) outside the four corners of an agreement–sometimes referred to as an anti-reliance clause; or
(b) the parties to an agreement specifically limit the universe of information relied on as enumerated in an agreement. Both such provisions, if carefully drafted, will be enforced, as explained in this decision, in order to limit or bar claims that either misrepresentations or omissions outside the four corners of an agreement form the basis for a claim. As this ruling demonstrates, however, such restrictive clauses will not bar claims that the representations in the agreement itself were breached or fraudulently made.
An article that explains the case in more detail was published by yours truly in the current issue of Directorship, the magazine of the National Association of Corporate Directors. The name of the case is Prairie Capital III, L.P. v Double E Holding Corp., C.A. No. 10127-VCL (Del. Ch. Nov. 24, 2015).