Interpretation of Contractual Survival Clauses Under Del. Law
Agreements, especially acquisition agreements, typically contain representations and warranties by one party to the other. The agreements also typically prescribe the duration of those representations and warranties in so-called survival clauses. The treatment of these clauses under Delaware law may surprise many practitioners. In GRT v. Marathon GTF Technology Ltd., C.A. No. 5571-CS (Del. Ch. Jul. 11, 2011), Delaware Chancery Court Chancellor Leo E. Strine Jr. held that a clause limiting the period of time in which contractual representations and warranties survive closing acts as a statute of limitations on the buyer's ability to commence litigation for breach.