SW Legal Educational Publishing

Teamwork in Bid Preparation Created Right to Restitution
Description Two firms worked together to prepare complex bid for buyer. One firm dropped the other before getting the bid. The dumped firm, while not having a firm contract, had a teaming agreement that allows recovery of restitution damages.
Topic Contracts
Key Words Teaming Agreement, Breach, Damages
C A S E   S U M M A R Y
Facts The parties agreed to work together to bid to build equipment requested by the Greek military. After working for some time on specifications, negotiating with the buyer, and being chosen as a final candidate for the job, TWC told ATACS it was disappointed with ATACS behavior and obtained the contract on its own, with minor modifications from the joint proposal submitted previously. ATACS sued TWC for breach after it subcontracted the work ATACS had planned to do to another firm. District court ruled for ATACS but awarded nominal damages of $1. ATACS appealed.
Decision Affirmed in part; remanded. There was not a final contract between the parties, but there was a "teaming agreement." "The fact that the parties never finalized an implementing subcontract is usually not fatal to enforcing the teaming agreement on its ownif the parties enumerated definite terms of behavior governing the partied during, or even after, the bidding process." The nominal damages are not appropriate, in the breach of a team agreement. Lost profits or expectation damages are too uncertain, but the fair value of the work contributed to the bid submitted to the military would be an appropriate restitution.
Citation TACS Corp. v. Trans World Communications, Inc., F.3d (1998 WL 566026, 3rd Cir.)
155 F. 3d 659 (3rd Cir., 1998)

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