Don’t Assume That Closely Related Agreements Will Be Interpreted As One Contract
A post on the website of The In-house Advisor offers some cautionary advice about transactions that may be documented through a primary contract and subsidiary agreements that are referenced in, or even attached as exhibits to, the primary.
Shep Davidson of Burns & Levinson explains:
“While there is nothing inherently good or bad about papering a transaction this way, it is important to keep in mind that doing so may mean that the dispute resolution provisions of the primary contract do not apply if litigation arises and only involves a claimed breach of a subsidiary contract. Indeed, that is the hard lesson that was learned by the defendant in National Dentix, LLC v. Gold.”
He writes that the lesson here is that “even very closely related agreements still may be viewed as completely independent if there is a claim that only one of them has been breached.”
