In Seidensticker v. The Gasparilla Inn, Inc., (Del. Ch., June 19, 2007), read opinion here, the Chancery Court enforced the terms of a Stock Purchase Agreement that did not include a specific price, but provided a procedure by which a third-party valuation would be performed for the purchase of shares. The Agreement also provided for a right of first refusal that needed to be exercised with a specific time period–a deadline that the defendants failed to meet. The court addressed the claim for a declaratory judgment on cross-motions for summary judgment, a procedural context well-suited for contract interpretation.
After defining a "right of first refusal", the court observed that such a right will be strictly construed in accordance with the contract provisions that created that right. Although the court will not write terms into a contract, especially when the language is clear, the court observed that: "A contract does not fail simply because the price is not specified." Here, the parties provided in the agreement for a procedure by which the price for the shares would be determined "without any new expression by the parties themselves."
Lastly, the court dismissed arguments by the defendants for waiver by "oral modification" as well as estoppel.
SUPPLEMENT: As I am up to date on summarizing those cases that this blog focuses on, I want to add here, by general comparison, a case I recently came across, and which involves a situation that many litigators encounter. In Smyth v. D.B. Enterprise Dev. & Bldrs, Inc., et al., 94 Del. Cty. Rep. 161 (2006), read opinion here, the Court of Common Pleas of Delaware County, Pennsylvania (the trial court of general jurisdiction, equivalent to the Delaware Superior Court), addressed an issue of the enforceability of an "oral settlement agreement" that the attorneys for the lawyers had documented in letters they exchanged–with the caveat that the agreement would need to be formally memorialized in a written agreement. The court concluded that it would "enforce oral settlement agreements when the parties have failed to execute them in writing if the parties have agreed upon the essential terms of the agreement. " (citations omitted).