Good Faith Clauses Not Just For Show: Del. Supreme Court

Law360, New York (May 28, 2013, 10:31 PM EDT) -- Promises to negotiate in good faith aren’t boilerplate — they are enforceable, and violations can be costly, the Delaware Supreme Court affirmed Friday in a decision attorneys say should serve as a warning to parties in early-stage contract negotiations.

The decision by Chief Justice Myron Steele, which affirms a 2011 chancery court ruling, keeps Siga Technologies Inc. on the hook for sandbagging a proposed merger and drug licensing agreement with PharmAthene Inc. back in 2006.

It’s a reminder to take care when drafting term sheets and...
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