A recent Court of Chancery letter ruling provides useful definitions and related statements of Delaware contract law in connection with issues that arose over an asset purchase agreement. In CHS/Community Health Systems, Inc. v. Steward Health Care System LLC, C.A. No. 2019-0165-JRS (Del. Ch. Aug. 21, 2020), the following statements of law provided by the court are useful for corporate and commercial litigators:

  • The court defined the standard for determining whether a party may be a third-party beneficiary to a contract, and denied a motion to dismiss even though the agreement at issue disclaimed an intent that there be any such beneficiary. See footnote 32 and accompanying text.
  • Also useful for the toolbox of Delaware litigators is the court’s description of those circumstances when an unjust enrichment claim may survive a motion to dismiss, or when a breach of contract claim may foreclose that cause of action. See footnote 44 and accompanying text.
  • When a contract is unambiguous a motion to dismiss may be timely. Otherwise, if extrinsic evidence is needed, an MTD may be premature. See Slip op. at 8.