1. Jesse r. Binnall
Teaming agreements

2. Teaming agreements
Enforcement of Intent Or Agreements to Agree?

3. UNDERSTANDING SOME Basic Contract principles
Teaming agreements
UNDERSTANDING SOME Basic Contract principles
Offer, Acceptance, and Consideration
Mutual Assent of Parties
Sufficiently definite in its terms (not vague)

4. Issues to consider Which jurisdiction’s laws will apply?
Teaming agreements
Issues to consider
Which jurisdiction’s laws will apply?
Differences between pre-award obligations and post-award obligations
Severability clauses
How certain and definite are the terms

5. VIRGINIA LAW – two views of enforceability of teaming agreements
EG&G, Inc. v. Cube Corp, 63 Va. Cir. 634 (Fairfax Co. 2002) (Ney, J.) - Looks to intent of parties
Cyberlock Consulting, Inc. v. Info. Experts, Inc., 939 F. Supp. 2d 572 (E. D. Va. 2013) (Cacharis, J.) - Parol evidence cannot be used to create ambiguities - Intent does not create a binding contract; rather whether the parties mutually assented to a legally binding agreement

6. Teaming agreements
The Supreme Court of Virginia Steps In: Navar, Inc. v. Fed. Bus. Council, 291 Va. 338 (2016)
Another set aside contract
Teaming agreement provided that parties would negotiate in good faith to come to terms on a subcontract if they won the contract
51% / 49% arrangement
Found that the teaming agreement did not provide the necessary certainty to result in a binding contract
Essentially adopted the Cyberlock analysis

7. “The rules of contract law do not apply… because it is merely an agreement to agree to negotiate at a future date.”
Navar, Inc. v. Fed. Bus. Council,
291 Va. 338 (2016)

8. Status of Teaming Agreements Post-Navar
For any hope of enforceability, a teaming agreement must have definite terms. Anything that is left to future negotiation is likely no better than a gentlemen’s agreement.
Still possible liability for unjust enrichment.
A plaintiff may recover for unjust enrichment under the Trade Secrets Act if it can prove that it 1) conferred a benefit on the defendant, albeit involuntarily; 2) the defendant knew of the benefit and should reasonably have expected to repay the plaintiff; and 3) the defendant accepted or retained the benefit without paying for its value. Collelo v. Geographic Services, Inc., 283 Va. 56, 68 (2012).

9. Teaming agreements
Other jurisdictions
California: Teaming agreements are enforceable if it uses best efforts to achieve a common objective in a closed, discrete, and actionable way.
Maryland: Unenforceable agreements to agree.
Florida: Fuzzy lines, but allowed a case to proceed where parties were to use “best efforts” to negotiate a subcontract.
New York: Preliminary agreements are enforceable but may only require good faith negotiation.

10. Final Thoughts Always know which jurisdiction’s laws will apply
Teaming agreements: Final Thoughts
Final Thoughts
Always know which jurisdiction’s laws will apply
Look at how definite the terms are
Know whether the contract is severable and whether there might by unjust enrichment liability
Talk to a lawyer first so you have less risk of having to talk to a litigator later

11. Jesse R. Binnall Harvey & Binnall, PLLC jbinnall@harveybinnall.com
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