On February 7, 2025, WLF asked the Delaware Supreme Court not to use the implied covenant of good faith and fair dealing to rewrite contracts. The implied covenant bars contracting parties from exploiting each other in ways that could not possibly have been foreseen when the contract was signed. Delaware’s courts often correctly note that the implied covenant does not override a contract’s explicit terms. Sometimes, however, those courts also say that the implied covenant can be used to create new terms the parties could have, but did not, think to include in their contract. Here a trial court added such terms to an earnout provision in a merger-and-acquisition contract. WLF’s brief supports reversal of that rewrite and urges the Delaware high court not to let the implied covenant drift too far from the contract’s text. WLF is grateful to Nicholas E. Skiles of Swartz Campbell LLC for his pro bono assistance in filing of WLF’s brief.
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