Opinion ID: 1196085
Heading Depth: 4
Heading Rank: 2

Heading: Context of the Negotiations

Text: The second factor here, the context of the negotiations, is helpful in distinguishing type II agreements from the fully binding commitments that constitute type I arrangements. An agreement is likely to be a type II preliminary agreement, and not a fully binding type I preliminary agreement, when it is subject to numerous contingencies that ha[ve] the potential to dramatically affect planning, execution, and management of the ultimate contractual objective. Brown, 420 F.3d at 158; see also Tribune, 670 F.Supp. at 500-01. Parties enter into type II agreements committing themselves to good-faith efforts to reach agreement on the remaining terms, but not to the ultimate objective when they seek to preserv[e] flexibility in the face of future uncertainty rather than establish determinative methodologies that will apply to future contingencies. Brown, 420 F.3d at 158. Here, this factor favors the conclusion that the April 9 agreement was of the type I varietya definite agreement to buy and sell the AVT stock, subject to CCC's ability to secure financing. The parties fore-saw that their transaction had the potential to be affected by a future contingency, namely, CCC's failure to obtain the needed financing. They chose to establish a determinate framework, rather than a flexible one, to address that contingency. The April 9 agreement thus expressly provided that Immunotherapy and CCC would divide the market for the virtual lymph node technology if CCC was unable to purchase Immunotherapy's AVT stock. Immunotherapy, moreover, was the party that strongly desired that the provisions related to the division of the technology be binding as to [CCC's] making efforts to finance, and as to ... the plan [for dividing the technology] if [CCC] fails to purchase [the] AVT interests. Indeed, the parties' correspondence indicates that Immunotherapy, anxious to wind up its affairs, adamantly insisted that the technology-splitting arrangement have legal force upon expiration of CCC's deadline for obtaining financing, and before the June 1 closing date. The context of the negotiations thus strongly suggests that the parties sought determinateness and certainty in the April 9 agreement, not flexibility and optionality subject to the parties' good-faith efforts to reach agreement as to open issues.