THE WORDS MEAN WHAT THEY SAY: CHANCERY COURT ADHERES TO PLAIN MEANING OF TYPICAL CONTRACT TERMS
In Yatra Online, Inc. v. Ebix, Inc., C.A. No. 2020-0444-JRS (Del. Ch. Aug. 30, 2021), Vice Chancellor Joseph R. Slights III ruled that a merger agreement provision stating “there shall be no liability on the part of any party” following termination meant precisely that. Accordingly, he dismissed the terminating party’s breach of contract claims at the pleading stage. In so ruling, the Vice Chancellor rejected various interpretations proffered by the terminating party that either ignored the plain meaning of the termination provision or sought to explain why the plain meaning was inapplicable under the circumstances. It is of no small comfort to M&A practitioners, who value consistency and certainty from the judiciary, that the Chancery Court gives tried and true contract provisions their meanings as accepted in the marketplace.
Robert S. Reder
Paul W. d’Ambrosio