Goes Back To Contract Law -- What Makes A Contract Binding?
A contract is binding when the following conditions are met:
1) Offer -- SIGA made an offer to PIP for the company based upon the conditions in the LATS agreement.
2) Acceptance -- PIP agreed to merge, but the offer was not consummated by SIGA because they re-evaluated the drug potential after additional trials and proof resulting from the PIP loan to SIGA.
3) Consideration -- SIGA offered a 50-50 split after the initial $40 million to cover research costs. PIP offered the "bridge" loan to help provide additional proof of the efficicy of the drug and to assist SIGA in getting further funding for the research.
4) Genuine Assent -- SIGA agreed to by PIP over the 4 months of negotiations and agreements. PIP agreed to be bought out based upon the current negotiations in progress (never disagreed to be purchased).
5) Capacity (Competent Parties) -- Both parties were aware that the drug was worth over $1 billion, if effective, and if marketed, after an approved contract. Both parties were public companies with BODs that were competent and aware of the value of the drug.
6) A Legal Object -- The LAT agreements were legal documents executed by both companies, although not signed by the two parties. Howver, over 4 months were spent developing the terms of the agreement to merge.
In the end, the judge will assert that the agreement was a binding contract. Damages, would be based upon the original agreement to split the profit 50-50 after the $40 million outlay repayment by SIGA. Since no restitution for the "breach of bad faith" can be estimated, no additonal damages can reasonably be rewarded other than the original loan consideration.
That is why the Delaware judge questioned "speculative" damages. Although the PIP lawyer argued that "speculative" damages were in order, considering the nature of the case in which the negotiation in "bad faith" occurred (buyout dropped within 2 weeks of the news to SIGA that the drug was worth multiple billions), PIP was only proposing an "equitable" settlement based upon the original negotiated terms.
"The LAT agreements were legal documents executed by both companies, although not signed by the two parties."
Execute: "To complete; to make; to sign; to perform; to do; to carry out according to its terms; to fulfill the command or purpose of. To perform all necessary formalities, as to make and sign a contract, or sign and deliver a note. Execute is the opposite of executory, incomplete or yet to be performed."
A party must agree to the terms of a contract in order for it to become legally binding. Although this is usually done by the signature of those with authority to enter into the agreement, it is commonly recognised that parties can enter into a contract by a course of dealing, signifying their acceptance of the terms of the contract.
In January 2009, the High Court in Grant v Bragg considered whether a contract was formed by two parties agreeing to the terms of the draft contract via e-mail. The Court considered it was enough for Mr Grant to have e-mailed Mr Bragg, accepting the contract's terms previously e-mailed to him by Mr Bragg's lawyer, and that it did not matter that neither party had actually signed the contract. The Court acknowledged it may have been the parties' original intention to be bound only on execution of the final contract, but maintained it was evident that their intentions had changed during the course of their e-mail correspondence.
In this case, the court believed it was clear the parties had intended to enter into the contract via e-mail, and that to hold otherwise would just serve to defy the commercial reality of the situation.
This case emphasise the importance of ensuring that a negotiating party does not agree to terms by email (or any other method of communication) unless it wishes to be legally bound by them, and of ensuring that, once all terms are agreed, the contract is duly signed by all the parties so that there can be no doubt as to the parties' intentions.
Wonder how many emails were sent to PharmAthene and back and forth to SIGA indicating the intention to consummate the deal and to merge their two companies?
Yah Amln, but they got it down pretty good with a marks a lot on toilet paper from the Hardy's men's room, but the darn folks at Siga didn't want to touch or sign it because they were concerned where that toilet paper had been before they took down the "contract" terms on it....LOL!
One huge huge problem with everything you said Is that if you read Parson's deceicion at all (which you obviously did not) you would know that first thing he did was rule that the LATs was found be NoN binding, as in NoN Binding Period Get it???? Then went on to make up a fairytail about Promissory estoppel but for that firstly please produce where/what damages PiP endured??? Please Read something about what you are going to write about for yourself not what you read form these Boards before you waste more Cyber space.