Trifecta Multimedia Holdings Inc. v. WCG Clinical Services, C.A. No. 2023-0699-JTL (Del. Ch. June 10, 2024)
Sophisticated parties frequently include “anti-reliance” clauses in their transaction agreements, whereby one or both parties expressly disclaim reliance on representations made outside of the agreement. In this case, the Court of Chancery considered whether an integration clause precluded a fraud claim based on expressions of future intent when the agreement lacked an explicit anti-reliance provision. Breaking with two earlier decisions, the Court found that an integration clause alone is insufficient to bar such a fraud claim.
The defendants moved to dismiss the plaintiff's fraud claim based on an integration clause in the parties’ acquisition agreement. Relying upon two earlier decisions of the Court of Chancery— Shareholder Representative Services LLC v. Albertsons Companies, Inc. and Black Horse Capital, LP v. Xstelos Holdings, Inc.—defendants argued that extra-contractual expressions of future intent are an exception to the general rule that fraud claims are only barred by explicit anti-reliance language. Because the alleged fraudulent statements concerned expressions of future intent and were not factual misrepresentations, Defendants argued the integration clause barred those claims. The Court rejected this argument. The Court explained that both Albertsons and Xstelos relied upon Abry Partners v. F & W Acquisition LLC, which rejected the notion that an integration clause without explicit anti-reliance language barred fraud claims. The Court reasoned that Albertsons and Xstelos misapplied Abry’s holding. Therefore, the defendants' arguments failed because they were based on a misapplication of the law. Accordingly, the Court denied the defendants' motion to dismiss.
