E. I. Du Pont De Nemours and Company v. Chemtura Corporation

E. I. Du Pont De Nemours and Company (DuPont) (plaintiff) purchased a fluorine chemical business from Chemtura Corporation (defendant) using an asset-purchase agreement. In this agreement, Chemtura provided warranties that the assets were in good repair and that the facility was legally compliant. Chemtura also agreed to indemnify (i.e., reimburse) DuPont for breaches of these warranties but with specified limitations. In § 8.4, the agreement stated that Chemtura would not be required to indemnify DuPont “unless on or before” the four-year anniversary of the sale date, DuPont notified Chemtura of a breach claim “in writing specifying the amount and factual basis of that claim in reasonable detail.” In addition, § 11.4 of the agreement required that all notices be in writing and delivered simultaneously to both Chemtura’s general counsel and its outside counsel. After the sale, DuPont encountered multiple problems with the assets that required repairs. DuPont informed Chemtura representatives about these problems, and Chemtura and DuPont negotiated solutions for some of the issues. However, Chemtura would not agree to fix problems relating to the facility’s refrigeration units and fire-suppression systems. Six years after the sale, DuPont sued Chemtura in state court, alleging that Chemtura had breached the asset-purchase agreement by failing to indemnify DuPont for these issues. Chemtura claimed that it had no contractual obligation to indemnify DuPont because (1) the agreement contained a condition precedent to indemnification, namely, provision of a written, detailed notice of the claim to Chemtura’s general and outside counsel within four years of the sale; and (2) DuPont had not strictly satisfied this condition. DuPont did not dispute that its written notice to Chemtura’s counsel was provided outside the four-year window. However, DuPont argued that (1) the notice provision was not an express condition precedent but rather an ordinary contractual requirement and (2) DuPont had substantially complied with this requirement by providing actual notice of the claims to Chemtura’s representatives during the four-year window. The trial court entered judgment for Chemtura, finding that the notice provision was an express condition precedent and, therefore, that DuPont’s failure to strictly comply with the condition excused Chemtura’s indemnity obligation. DuPont appealed.