On April 7, 2022, the First Department issued a decision in International Business Machs. Corp. v. GlobalFoundries U.S. Inc., 2022 NY Slip Op. 02341, holding that fraudulent inducement and breach of contract claims were not duplicative, explaining:
IBM claims that on numerous occasions, and in order to induce it to enter into the contemplated transaction, GlobalFoundries told IBM that it had made a strategic decision and financial commitment to expand its presence, capacity, and investment in high performance semiconductor technology and chips. IBM alleges that those statements were false when they were made, and that without those assurances it would not have entered into the various contracts with GlobalFoundries.
IBM states a cause of action for fraudulent inducement in alleging that GlobalFoundries knowingly made material misrepresentations of present fact about its business plan and financial commitment that were untrue when made, and that IBM would not have entered into the agreements with GlobalFoundries had it not been for those misrepresentations. In addition, the alleged misrepresentations of present fact are collateral to the parties’ agreements.
The fraudulent inducement claim is not duplicative of the breach of contract claims, as the fraud claim is not based upon promised performance of an obligation of GlobalFoundries under the contracts, and IBM seeks separate and distinct damages for each claim. Furthermore, the various contracts’ merger clauses are general, vague, and merely omnibus statements that the written instrument embodies the whole agreement between the parties. Thus, these clauses do not preclude the use of parol evidence to establish the fraudulent inducement claim. While the limited warranties or disclaimer provisions are more specific regarding representation and warranty subject matters covered by each agreement, none of the disclaimers could reasonably be interpreted to address representations about GlobalFoundries’s business plan and strategies.
(Internal citations omitted) (emphasis added).