The team agreement amended by CGI-FCi identified several subcontracting conditions and acknowledged that even the 41% participation in the work was not set in stone. Because CGI could not or could not negotiate definitive terms or remedies (for example. (B) if FCi did not subcontract CGI, CGI had to have confidence that a good faith negotiation would result in an acceptable subcontract. While the courts have generally concluded that the “pre-price” clauses contained in merger contracts, such as exclusivity and confidentiality, are enforceable, what if the parties fail to agree on the terms of subcontracting? A team agreement is a standard document between two parties who wish to cooperate in the preparation and presentation of an offer. The basis of the agreement is that if the offer is successful, one party acts as a principal contractor and the other appoints subcontractor. The Virginia Supreme Court considered the applicability of team agreements in W.J. Schafer Associates, Inc. v. Cordant, Inc., Va. Record No.
961945, (Va S. Ct. 1997). Cordant, who was either out of contract or re-procured the goods provided by the subcontractor at a much higher price under the team agreement, sued his team member for breach of contract when he could not reach an agreement on a definitive subcontract when the main contract was awarded. The team agreement stipulated that the parties would “negotiate a sub-contract in good faith on time.” The Virginia Supreme Court ruled that Cordant was not entitled to a violation when the parties did not accept a final sub-contract and stated: “… there must be mutual agreement between the contracting parties on conditions which, in the present circumstances, are reasonably safe to have an enforceable contract. There has not been such a mutual commitment. No amount was indicated in the agreement and no method or formula was used to determine the amount to be paid. A court should not set the terms of the transaction on which the parties could finally agree. Since the agreement does not provide a reasonable basis for the provision of a remedy for its violation, it is too vague and unlimited to be enforced.
The court also rejected CGI`s undue enrichment application and found that the company could have revoked the amended team agreement as a result of the fraud, but upheld the contract and sued for damages. An applicant cannot apply for unjust enrichment in Virginia if there is an explicit, enforceable contract on the object. Conversely, the U.S. Court of Appeals for the Third Circuit, under Pennsylvania law, considered that a principal contractor was in good standing when it signed a contract with another supplier in violation of an exclusive team agreement and found that the reciprocal promises of the team agreement, including the agreement to cooperate exclusively in the development of a proposal , were sufficient for the drafting of the contract. “… The “compilation agreement” between the defendant and the plaintiff constituted an enforceable contract with sufficiently specific terms of execution, despite the absence of a definitive enforcement document proving the parties` agreement. ATACS Corp. v. Trans World Comm`n, Inc., 155 F.3d 659, 663 (3rd Cir. 1998). CGI appealed to the Virginia Supreme Court, but dismissed CGI`s infringement and maintained that there was no binding agreement for subcontracting. On the contrary, the parties would have explicitly conditioned the formation of a subcontracting to future events and negotiations in good faith.