An acquirer of technology assets in an earn-out transaction may have a duty to make reasonable efforts to promote the technology – 1st Circuit

A federal appeals court has ruled that, at least under Massachusetts law, a company that acquired another company’s technology assets, for cash plus an earn-out, was obligated to use reasonable efforts to promote the tech­nology, so that the seller would have a shot at the earn-out payments. See this Law.com article about the First Circuit’s Sonora Scanners case, re­vers­ing and remanding a summary judgment in favor of the acquiring company (discussed on another point in this posting).

See also: (list is automatically generated)

• Kara v. Stamps.com – another illustration of the dangers of going it alone after signing a nondisclosure agreement to see someone’s technology
• Six tips for negotiating best-efforts obligations
• Signing someone else’s name with permission but without so indicating was ‘dishonest’ – 7th Circuit (Posner)

Tagged as: Earn-outs, Mergers