Missed Notice Deadline Bars Contract Claim for Escrow Funds

A recent decision of the Delaware Court of Chancery provides a cautionary tale for corporate and commercial litigation practitioners about the importance of complying with contractual notice deadlines. In PR Acquisitions, LLC v. Midland Funding LLC, C.A. No 2017-0465-TMR (Del. Ch. April 30, 2018), the court barred a claim made for funds held in escrow because the applicable agreement required notice to be sent to the seller, but instead notice was mistakenly sent to the escrow agent. Although actual notice by phone was given to the seller prior to the deadline, the court explained why that did not satisfy the manner of notice required by the deadline provided for in the agreement. Brief Factual Background The basis for the dispute between the parties was the sale of consumer debt accounts. The purchase and escrow agreements for the transaction required that claims for funds held in escrow based, for example, on allegations of breach of representations and warranties, be sent to…

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