Recent Delaware cases, including Pearce v. NeueHealth (2024) and Trifecta Multimedia Holdings v. WCG Clinical Services (2024), make clear that parties in M&A deals remain exposed to fraud claims when anti-reliance clauses are missing or poorly drafted. In Pearce, the court refused to dismiss fraud claims based on projections shared during negotiations because the merger agreement did not contain a comprehensive anti-reliance clause binding the buyer. The decision underscores Delaware’s firm stance: fraud claims cannot be eliminated through implication or boilerplate language – only precise, buyer-authored disclaimers of reliance will do.
Delaware’s framework for anti-reliance clauses originates with Abry Partners V, L.P. v. F&W Acquisition LLC (2006). There, then-Vice Chancellor Strine distinguished between two types of fraud: intra-contractual fraud, which involves misrepresentations in the agreement itself and cannot be disclaimed, and extra-contractual fraud, which involves statements made outside the agreement and can be disclaimed if the contract clearly states the buyer relied only on the written representations. Since Abry, Delaware courts have consistently applied this principle. For example, in FdG Logistics v. A&R Logistics (2016), the Chancery Court stressed that effective disclaimers must come from the aggrieved party; a seller’s statement about what it is or is not warranting does not substitute for a buyer’s own disclaimer of reliance. Similarly, in Prairie Capital III v. Double E Holding Corp. (2015), the court explained that while “magic words” are unnecessary, the clause must be explicit and comprehensive, extending to oral statements, data room materials, management presentations, and financial forecasts.
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