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“Contracting for Irreparable Harm May Not Be as Effective as You Think”

On February 8, 2013 by Schnader

Stephen J. Shapiro and Aaron J. Fickes authored the article “Contracting for Irreparable Harm May Not Be as Effective as You Think” in Bloomberg BNA Corporate Accountability Report, 11 CARE 149, on February 8, 2013. The article explains¬†an underappreciated distinction between Delaware and federal law involving the movant’s burden in seeking injunctive relief for breaches of contract. Delaware courts essentially view irreparable harm clauses as binding admissions, sometimes relying on them exclusively to hold that the moving party has met its burden. Federal courts, however, give such clauses little, if any, weight, and examine the evidence presented by the parties to make an independent irreparable harm determination. In light of this disparate treatment, the article concludes with recommendations for contract drafters, parties to agreements, and litigators seeking to enforce various types of agreements.