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Should a court enforce a contract that permits lying?



That's the question Delaware Vice Chancellor Strine faced in a recent case.

As distasteful as it may sound, sometimes the parties should be able to keep even lying out of the grasp of error-prone courts. That�s particularly so when you have two very sophisticated parties (here, private equity funds), both subject to reputational constraints in their industry, and a carefully drawn, thoroughly negotiated contract. Here�s a discussion of the court's thoroughly reasoned decision on this issue that, mistakenly I think, refuses to enforce the agreement.

 

 


Rafael Mangual
Project Manager,
Legal Policy
rmangual@manhattan-institute.org

Katherine Lazarski
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.