News & Analysis as of

Covenant of Good Faith and Fair Dealing

A&O Shearman

Delaware Court Of Chancery Largely Dismisses Post-Merger Earnout Claims

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On May 1, 2026, Vice Chancellor Bonnie W. David of the Delaware Court of Chancery largely granted a motion to dismiss claims for fraud, breach of contract, and breach of the implied covenant of good faith and fair dealing,...more

White & Case LLP

Rewriting the foundations: Key changes under UAE Federal Decree Law No. 25 of 2025

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On 1 June 2026, the United Arab Emirates' new civil code (Federal Decree Law No. 25 of 2025) (the "New Civil Code") came into force, replacing Federal Law No. 5 of 1985 (the "Old Civil Code"). The new legislation reflects the...more

Vedder

Vedder Prevails in the North Carolina Supreme Court

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Vedder’s litigation team secured a win on May 22, 2026 for a client involving an interlocutory appeal of the North Carolina Business Court’s exercise of personal jurisdiction over several defendants named in a commercial...more

Zelle  LLP

Appraisal Award Stands Firm in Petropoulos

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Appraisal awards seem to be a hot topic in Texas courts as of late, and Petropoulos v. Safeco Ins. Co. of Indiana, No. 4:23-CV-00500-ALM-BD, 2026 WL 408597 (E.D. Tex. Feb. 12, 2026), report and recommendation adopted, No....more

Morris James LLP

Delaware Supreme Court Addresses Implied Covenant in Earnout Dispute

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Johnson & Johnson v. Fortis Advisors LLC, No. 490, 2024 (Del. Jan. 12, 2026) - The implied covenant of good faith and fair dealing is a narrow doctrine that is employed to imply terms in contracts to protect the...more

Lathrop GPM

Nebraska Federal Court Dismisses Franchisees’ Suit Alleging Early-Renewal Rights

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A Nebraska federal court granted franchisor Home Instead, Inc.’s motion to dismiss nineteen Home Instead franchisees’ claims for breach of a 2024 Settlement Agreement. WJM Home Care, LLC v. Home Instead, Inc., 2026 WL 904279...more

Bradley Arant Boult Cummings LLP

Good Faith Requires More than Interpleading Policy Limits: Georgia Court of Appeals Reinstates Bad-Faith Claims in Cannon v....

May a liability insurer discharge its obligations to its insured simply by interpleading its policy limits, even when doing so leaves the insured exposed to a multimillion-dollar excess judgment? The Georgia Court of Appeals...more

Venable LLP

U.S. vs. UK Contract Law in Advertising Agency Agreements Explained

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Negotiating a cross-border, U.S./U.K. advertising agency services agreement adds some additional wrinkles to the already well-wrinkled list of considerations for every ad agency contract. Obviously, extra consideration must...more

Nossaman LLP

Delaware Courts Sharpen Focus on Earn Outs: Review of Recent Case Law and Practical Guidance for Dealmakers

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Two recent Delaware decisions on earn-out disputes offer critical guidance to dealmakers and counsel for framing earn out provisions and disputes. Two 2026 decisions (the Delaware Supreme Court’s ruling in Fortis Advisors LLC...more

Bass, Berry & Sims PLC

Delaware Supreme Court Upholds Extracontractual Fraud Claim in Earnout Dispute

In Johnson & Johnson v. Fortis Advisors LLC, the Delaware Supreme Court, in pertinent part, affirmed the Court of Chancery’s finding of extracontractual fraud in the earnout context against the buyer (J&J)....more

Freeman Mathis & Gary

Arizona Court of Appeals emphasizes third-party administrators have no direct liability to insureds for bad faith

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In Wagner v. Arizona Municipal Risk Retention Pool, the Arizona Court of Appeals has reiterated that third party administrators are not liable to insureds for bad faith where there is no contractual nexus between the third...more

Carlton Fields

Florida Appeals Court Decisions Week of April 6 - 10, 2026

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U.S. Eleventh Circuit Court of Appeals - Dish Network v. Fraifer - copyright infringement - Hayes v. OWCP - Black Lung Benefits Act, “year” - Faulk v. Dimerco Exp - § 1983, racial discrimination, improper arguments,...more

Herbert Smith Freehills Kramer

Delaware Court of Chancery reinstates seller CEO and extends earnout payment window, as buyer’s ChatGPT strategy fails

On March 16, 2026, the Delaware Court of Chancery in Fortis Advisors, LLC v. Krafton, Inc. issued a post-trial decision in which the court resolved in favor of plaintiff sellers the first phase of a dispute over a buyer’s...more

Cadwalader, Wickersham & Taft LLP

Sacred Guarantees Survive: Lions Gate Notes Guarantee and Tortious Interference Claims Advance, Other Theories Fall Short

On March 17, 2026, Justice Joel M. Cohen of the New York Supreme Court, Commercial Division, issued a mixed ruling in CPPIB Credit Investments II Inc. v. Lions Gate Entertainment Corp., a dispute regarding Lions Gate’s...more

Herbert Smith Freehills Kramer

Navigating Contract Disputes: Views from Practice (UPDATED)

Herbert Smith Freehills Kramer is pleased to present Navigating Contract Disputes: Views from Practice, a series of seminars with accompanying guides, which will be rolled out over the coming months. This series aims to...more

McCarter & English, LLP

Don’t Trip at the Finish Line: Think Through the Implications of Release Language Before Your Client Signs

Don’t skip careful analysis of release language in the rush to paper a settlement—recycling generic language from a prior settlement can have unintended consequences. That’s the lesson from Bogda v. Bochenek, 236 Conn. App....more

Ropes & Gray LLP

Distressed Debt Legal Insights: Xerox and the “Non-Subsidiary” Drop-Down

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Welcome to Distressed Debt Legal Insights, Ropes & Gray’s periodic source of timely insights for professionals navigating the complex world of liability management and special situations finance....more

Butler Snow LLP

Texas Business Court’s Primexx Decision and Contracted-Down Duties

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In Primexx Energy Opportunity Fund, LP v. Primexx Energy Corporation, one of the first merits opinions from the newly created Texas Business Court, Judge Bill Whitehill addressed a recurring flashpoint in private equity and...more

Foley & Lardner LLP

Federal Court Denies Manufacturer’s Motion to Dismiss WFDL Claim

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A federal district court in Wisconsin recently denied a manufacturer’s motion to dismiss a dealer’s claims for violations of the Wisconsin Fair Dealership Law. The case offers insights into how the WFDL can apply to their...more

Cozen O'Connor

Indiana Recognizes Interpleader as a Bad‑Faith Safe Harbor

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The Indiana Supreme Court’s decision in Baldwin v. Standard Fire Ins. Co., 269 N.E.3d 1197 (Ind. 2025) provides clarity for insurers confronted with competing claims that exceed policy limits. In a matter of first impression,...more

Venable LLP

Chambliss v. NCAA: A Potential New Playbook for Future NCAA Eligibility Lawsuits

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Last week, Ole Miss quarterback Trinidad Chambliss secured a preliminary injunction from a Mississippi state court judge, clearing the way for him to compete in the 2026 season, effectively granting him a sixth year of NCAA...more

Cranfill Sumner LLP

Why Courts Won’t Save Sellers from Bad Earn‑Out Drafting

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Earn‑outs are supposed to bridge valuation gaps. In practice, they often create them. A recent North Carolina Business Court decision, Child Care Inc. v. LJ Schools (Carolina), Inc., 2026 NCBC 8, is one of the clearest...more

Cadwalader, Wickersham & Taft LLP

Structuring for Control, February 2026 - Payment Direction Letters: Their Role and Usage in NAV Financings

In net asset value (“NAV”) financings, a payment direction letter (“PDL”) is a useful tool that may be entered into in order to control the flow of cash from the underlying portfolio investments directly to a lender...more

Mayer Brown

Delaware Law Alert: New Perspectives on Earnouts

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The Delaware Supreme Court has clarified important aspects of Delaware law in the context of an earnout dispute that the Delaware Chancery Court decided in favor of the sellers in 2024. We analyzed the Chancery Court’s...more

Bracewell LLP

The UAE’s New Civil Code Explained: Practical Changes for Businesses and Investors

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Federal Decree Law No. 25 of 2025 (the “New Civil Code”) will come into effect on 1 June 2026, repealing and replacing Federal Law No. 5 of 1985 (as amended) (the “Old Civil Code”), which has formed the backbone of civil and...more

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