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Specific Performance, Monetary Damages and Reverse Breakup Fees in M&A: Mitigating Risks if a Counterparty Refuses to Close

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, May 15, 2024

Recorded event now available

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This CLE webinar will provide guidance for negotiating and enforcing remedies when a deal fails to close due to a breach by either party with a focus on specific performance, limitations on recovering monetary damages, and reverse breakup fee provisions. The panel will provide considerations for buyers and sellers, tips for negotiating and structuring these remedy provisions in M&A agreements, and strategies for navigating the contractual interplay between specific performance, monetary damage claims, and reverse breakup fees.


Parties to M&A transactions should plan for the risk that their counterparty may refuse to close the deal even if the closing conditions are all satisfied. Fortunately, for a party confronting this scenario, courts have been receptive to demands that the party refusing to close should be forced to perform its obligations, respecting the parties’ intent in the M&A agreement that the specific performance remedy should be granted.

However, the specific performance remedy is not always granted. For example, in a recent Delaware decision (26 Capital Acquisition Corp. v. Tiger Resort Asia Ltd.), the court declined to grant specific performance to a buyer seeking to force a non-U.S. target to perform certain obligations. The panel will discuss how the Delaware courts view the specific performance remedy and drafting tips to increase the chance that the specific performance remedy will be granted.

An alternative remedy to specific performance is monetary damages. A recent Delaware decision (Crispo v. Musk) raised serious questions about a target's right to recover monetary damages reflecting the lost premium that its stockholders would have received if the buyer had closed the transaction. The panel will review this decision, its implications, and the proposed Delaware General Corporation Law amendment in response to this court decision.

Finally, the panel will review the structure and latest trend on the reverse termination fee, which is usually framed as liquidated damages payable by a buyer to a seller or target company in specified circumstances when a deal does not close.

Listen as our authoritative panel discusses the legal issues surrounding specific performance, reverse breakup fees and monetary damages, the seminal cases in this area, and practical considerations for deal lawyers when drafting these remedy provisions in M&A agreements.



  1. Overview of specific performance and reverse breakup fee terms
  2. Seminal Delaware Court of Chancery decisions construing specific performance and reverse breakup fee terms
  3. Pathway to enforcement of specific performance terms
    1. Relief available to buyers
    2. Relief available to sellers
  4. Irreparable harm--no adequate remedy at law
  5. Availability of expedited review in Delaware vs. other courts
  6. Reverse breakup fees
    1. Conditional specific performance and reverse breakup fees
    2. Reverse breakup fee remedies
  7. Practical considerations and key takeaways


The panel will address these and other key issues:

  • What are common specific performance and reverse breakup fee terms?
  • What is the interplay between specific performance, monetary damages and reverse breakup fee terms and what are some key drafting strategies and considerations?
  • When is specific performance available to a party to an M&A agreement?
  • Is Delaware always the preferred jurisdiction and venue for M&A disputes?


Haas, Steven
Steven M. Haas

Partner, Co-Head Mergers and Acquisitions Team
Hunton Andrews Kurth

Mr. Haas regularly counsels publicly traded corporations, privately-held businesses and boards of directors on...  |  Read More

Hu, James J.
James Jian Hu

Cleary Gottlieb Steen & Hamilton

Mr. Hu’s practice focuses on public and private merger and acquisition transactions. He regularly advises...  |  Read More

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