Boilerplate Matters: The Anti-Reliance Clause

Boilerplate Matters: The Anti-Reliance Clause

      All too often the “boilerplate” section of the contract is ignored. This lack of scrutiny is ill-advised as the language therein can have a material impact upon a decision, as exemplified in a recent ruling from Delaware.

     Mid-Cap Funding X Trust v. Graebel Companies, Inc., C.A. No. 2018-0312-MTZ (Del. Ch. April 30, 2020) involved the interpretation of a settlement agreement and the after-the-fact discovery by the plaintiffs that the defendant's representations made in the course of the settlement negotiations were incorrect. On that basis, the plaintiffs brought a complaint alleging fraudulent concealment, breach of the implied covenant of good faith and fair dealing, mistake and unjust enrichment. Those claims were rejected on a motion to dismiss because the Settlement Agreement contained both anti-reliance and integration clauses. As to the former, the Settlement Agreement stated that each party thereto do “is not entering into this Agreement in reliance upon any representations, promises or assurances other than those expressly set forth in this Agreement.” As for the integration (sometimes referred to as the merger) clause, the Agreement provided that it “supersedes any prior contracts, understandings, discussions, and agreements among the parties.” For that reason, the court dismissed the assertions, holding that any negotiations leading to the settlement agreement were “outside the four corners of the Settlement Agreements” and could not be considered.