## Facts

- Two Lockheed business units (LMSTS and Sanders) entered a 1996 memorandum allocating and coordinating automated test systems (ATS) subcontracting work for another Lockheed unit (LM Aero), including regular coordination meetings.
- In 2000, BAE purchased Lockheed’s AES division, including Sanders, under a Transaction Agreement; Lockheed retained LMSTS and LM Aero.
- The Transaction Agreement contemplated continuing ATS cooperation governed by the prior memorandum framework.
- At closing, the parties executed a new memorandum (MOA) substantially identical to the 1996 memorandum, substituting BAE/Sanders for Sanders.
- The MOA identified categories of ATS opportunities, provided for when BAE/Sanders would receive work or be able to compete, and required a coordination team to meet at least quarterly.
- From 2000 to about 2005, the parties operated under the MOA and BAE/Sanders performed substantial ATS work connected to LM Aero via LMSTS.
- By 2005, BAE alleged Lockheed began diverting ATS opportunities away from BAE/Sanders and resisted using the MOA’s coordination mechanisms.
- BAE sued for specific performance and damages for breach of contract and breach of the implied covenant of good faith and fair dealing, later adding unjust enrichment and declaratory judgment in the alternative.
- Lockheed moved to dismiss under Rule 12(b)(6), arguing the MOA was too indefinite and merely an unenforceable “agreement to agree.”

## Issues

1. Whether the MOA and related transaction provisions were sufficiently definite to be enforceable under Delaware law, or instead an unenforceable “agreement to agree” about future, unspecified work.
2. Whether the pleadings supported a reasonable inference of an objective intent by both parties to be bound by the MOA’s allocation and coordination process.
3. Whether the amended complaint adequately stated alternative claims for breach of the implied covenant, unjust enrichment, and declaratory relief at the pleading stage.

## Decision

- The court denied the motion to dismiss in substantial part.
- The court held that, at the pleading stage, the MOA and transaction provisions were plausibly sufficiently definite to form an enforceable contract governing a process for allocating future ATS opportunities.
- The court found the allegations supported an objective intent to be bound, based on the transaction context, the MOA’s structured mechanisms, and the parties’ course of performance.
- The court allowed BAE’s claims for specific performance, breach of contract, breach of the implied covenant, unjust enrichment (as an alternative theory), and declaratory judgment to proceed.

## Legal Principles

- A contract addressing future, not-yet-specified work may be enforceable if it provides sufficiently definite terms or a definite process that can be applied to later opportunities, even if price and scope for later projects are not fixed.
- Enforceability turns on objective manifestations of intent, assessed from the agreements’ language, the surrounding transaction context, and the parties’ course of performance.
- A structured, process-based allocation framework can be enforceable and is not necessarily a nonbinding “agreement to agree” merely because later implementing contracts will require further negotiation.
- On a Rule 12(b)(6) motion, well-pleaded facts are accepted as true and reasonable inferences are drawn for the nonmovant; dismissal is improper if relief is reasonably conceivable under the alleged facts.
- Alternative pleading may permit unjust enrichment and declaratory relief to proceed when the existence and scope of contractual obligations require factual development.

## Conclusion

The court held that BAE plausibly alleged an enforceable, process-oriented agreement governing future ATS work allocation and an objective intent to be bound, so dismissal on indefiniteness grounds was unwarranted and BAE’s contract and alternative claims could proceed.


BAE Sys. Info. & Elec. Sys. Integration, Inc. v. Lockheed Martin Corp., C.A. No. 3099-VCN (Del. Ch. Feb. 3, 2009)