In its recent decision in Nemec v. Shrader, the Delaware Supreme Court upheld the Delaware Chancery Court’s dismissal of a claim by two former stockholders that a board breached a stock plan’s implied covenant of good faith and fair dealing, stating that the Delaware courts should only imply terms into contracts when the non-asserting party is shown to have acted unjustly and in so doing has frustrated “the fruits of the bargain that the asserting party reasonably expected.” The Court also upheld the dismissal of fiduciary duty and unjust enrichment claims against the directors.

View full M&A Alert: "Delaware Court Addresses Applicability of Implied Covenant of Good Faith and Fair Dealing"