Ambiguous Contracts Interpretation In Delaware

The Delaware Supreme Court and Chancery Court have recently ruled that the law in Delaware is that if a contract is not ambiguous, the trial court may consider evidence to interpret or search for the parties intentions. Citadel Holding Corp. v. Roven, Del. Supr., 603 A.2d 818, 822 (1992). Pellaton v. Bank of New York, Del. Supr., 592 A.2d 473, 478 (1991). As provided in Gilbane Building Co. v. Nemours Foundation, D. Del., 666 F. Supp., 649, 652 (1985), "The parties to a contact can provide that a liquidated amount will be recoverable in the event of a particular type or types of damages, while actual damage will be covered in the event of [the presenting of evidence] other forms of damages." Every contract imposes a duty of good faith and performance. Restatement 2d Contracts, 205 (1981). "A breach of the obligation of good faith and performance may be overt or may consist of inaction." See, Rehoboth Resort Realty t/a Caldwell Banker Rehoboth Resort Realty v. Brittingham Enterprises, Inc., Del. Super., Civ. A. No. 91C-03-035, Lee, J. (July 21, 1992). Likewise case law provides that contingencies in real estate can be set forth in contracts which would cause the settlement and obligation of the parties to become null and void. Baldwin, et al. v. Starratt, Del. Super., C.A. No. 98A-11-016-CG, Goldstein, J. (July 16, 1999); Lee Builders v. Wells, Del. Ch., 103 A.2d 918 (1954).