By Nick Miller and Sam Cottell
Key Point
- A claim of "misleading or deceptive" is sometimes regarded as the great cure-all in business disputes. However, courts will not disregard the importance of the contractual terms that the parties agreed on.
Those shares you bought turned out to be dogs? You were misled into buying them. Your brand new DVD-toaster combination burns your crumpets? The advertising was deceptive. That business you took over is a disaster? The vendor engaged in misleading or deceptive conduct.
While it's easy to claim misleading or deceptive conduct, convincing a court is a different matter altogether.
In the October 2005 M&A Insights, we discussed the issue of disclosure during contract negotiations. We noted that non-disclosure of information by one side may be misleading or deceptive if the other side has a "reasonable expectation" that relevant information will be disclosed during the negotiations.
