Texas Business Court Enforces ‘In Perpetuity’ Payment Obligation: Takeaways From Cobalt Falcon v. AXS Investments

Short summary

A Texas court ruled that 'in perpetuity' in an M&A payment agreement means literally forever, enforcing plain-language meaning despite the obligated party's regret about the deal terms. Delaware contract law prioritizes explicit language and will not rewrite provisions even if enforcement produces unexpectedly large liabilities. Practical lesson: specify all contingencies and edge cases explicitly in transaction agreements; consider carefully which party controls triggering events like asset termination.

• •Texas court enforces 'in perpetuity' to mean indefinite payment obligation regardless of fund closure
• •Delaware law enforces plain contract language strictly; regret does not justify rewriting terms
• •Drafters must anticipate edge cases explicitly and consider who controls events that trigger payment obligations

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