Term sheets are often used to facilitate the negotiation of a transaction. When a term sheet is used, there is a risk that one party may seek to treat the term sheet as an enforceable contract. A recent decision by the Delaware Supreme Court highlights circumstances in which an agreement to negotiate in good faith can turn a non-binding term sheet into...
Part I of this article, which appeared in the March 2008 issue of The Metropolitan Corporate Counsel, discussed the antifraud and the risk allocation paradigms for dealing with disclosure obligations and liability disclosure, summarized below. Please visit www.metro-corpcounsel.com to view Part I.
The Trend In Disclosure Obligations
The recent "credit crunch" and the stress that it places on the M&A marketplace has increased the number of broken deals in which buyers seek to exit transactions due to frustrated expectations. As these busted deals lead to litigation, important lessons that can be of value to M&A practitioners are coming out of the court decisions.