In this case, the parties entered into a fairly typical big business (FCI) big business (CGI) equipment agreement for the processing of visas for the State Department. The parties negotiated the share of work shares (reading percentage) to obtain the work of FCI, and the team agreement established a framework for the negotiation of a subcontracting between FCI, the proposed general contractor, and CGI, the proposed subcontractor. After some time, the CFI worked with the Department of Foreign Affairs and, as part of the negotiations on this proposal, CGI`s work percentage was reduced in exchange for certain management positions for CGI in relation to the work by amending the original team agreement. However, the next day, the CFI submitted a proposal to the State Department that not only did not occupy the executive positions, but also further reduced CGI`s share of work. The Court then found that the potential harms associated with the fraud that led to the fraud could be speculative, since CGI`s shortfall on the basis of its incentive to contract out in the future (i.e. the team agreement) would not have a provision to quantify the shortfall. The court upheld the Circuit Court on all points. First, it found that the merger agreement (the details of which are well explained in the notice) involves too many contingencies to be a contract that could be applied to certain subcontracting provisions and that the Court of Justice then concluded that CGI`s approach to introducing it into the merger agreement (whether fraudulent or otherwise) did not matter, since CGI confirmed the contract. An explicit contract cannot form the basis for unjust enrichment or any other quasi-contractual requirement.
A brilliant case took place here in Virginia and was decided by the Virginia Supreme Court. This deal is CGI Fed. Inc. v. FCi Fed. Inc. While this is not necessarily a “construction case,” it is useful to set up some of the pitfalls of team agreements in general. Together, these provisions clearly show that the parties have never accepted the final terms of subcontracting and that they have explicitly linked the formation of a sub-mandate to future events and negotiations. Just as FCi could not have relied on this agreement to commit CGI to work as a subcontractor, CGI was unable to invoke the agreement to obtain FCi`s work as a subcontractor. The court will not impose a subcontract on the parties to an equipment agreement if they have expressly agreed to negotiate the essential terms of subcontracting in the future. But the CFI did not stop. After resolving some protests, the CFI`s negotiations with CGI began even less than the amended team proposal or agreement.
CGI began its work under a temporary agreement, received more than $2 million for its work and was subsequently fired by the CFI from the founding case. CGI sued FCi and claimed: (1) breach of contract because FCi did not renew a 41% subcontract and 10 management positions at CGI; (2) unjust enrichment because CGI would have spent $300,000 to assist FCi in its proposal, which would result in a profit of US$6 million for fCi; and (3) fraudulent incentives for loss of earnings. The jury awarded CGI nearly $12 million, but the Circuit Court set aside the verdict and appealed to the CFI and CGI. The court upheld the leave of absence from the judgment for unjust enrichment, finding that the team agreement was an enforceable, reciprocal and explicit contract and that the court told us all that until the subcontracting was carried out and the conditions clarified, it would proceed at its own risk.