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"Agreement to Agree" in Future Not Enforceable

By Francis G. X. Pileggi, Esq.

In Welsh v. Heritage Homes of DeLaWarr, 2008 WL 442549  (Del. Ch., Feb. 15, 2008), read opinion here, the Chancery Court refused to enforce a builder's "tie-in" agreement as an agreement to agree in the future without sufficiently definite or complete terms. The court ruled that:

“Delaware law requires that, ‘to be enforceable, a contract to enter into a future contract must specify all its material and essential terms, and leave none to be agreed upon as the result of future negotiations....'"

Compare this with the very recent Chancery Court decision in Pharmathene, Inc. v. SIGA  Technologies, Inc., summarized here on this blog, which--based on the facts of that case, denied a motion to dismiss an action to enforce an "agreement to agree in the future".

The Welsh case also regales its readers with a modern analysis of a claim based on the hoary  "rule against perpetuities".

Full post as published by Delaware Corporate and Commercial Litigation Blog on February 24, 2008 (boomark / email).