- 41 -
Settlement Term Sheet is binding or not,34 absent a definitive
and adverse party allocation in the settlement document, the
payor’s intent behind the settlement governs the allocation of
the damage payments.35 More importantly, at the time Ormet and
Mr. Boyle initially agreed to the settlement terms, they were
intending their $12 million payment to be for contract claims in
the six filed cases not tort-like personal injury claims by Mr.
Bradley, the possible existence of which had only been recently
raised. Thus, it is apparent the $12 million payment was only
34
“[W]hether [an] enforceable contract arises from
preliminary negotiations and letter of intent or must
await formal agreement depends on the intent of the
parties.” “In ascertaining the intent of the parties
to a contract, it is their outward and objective
manifestations of assent, as opposed to their
undisclosed and subjective intentions, that matter.” *
* * This is true “[g]iven the highly detailed nature of
the [letter of intent], the important commercial
circumstances in which it was negotiated, and the fact
that the [letter of intent] appears in all respects to
be a binding contract as to certain promises.”
[Gillenardo v. Connor Broad. Del. Co., No. C.A. 98C-06-
015 WLW, 2002 WL 991110, at *6 (Del. Super. Apr. 30,
2002); fn. refs. omitted.]
35 A settlement may be intended to cover claims not yet
added to an existing lawsuit. See Eisler v. Commissioner, 59
T.C. 634 (1973), acq. 1973-2 C.B. 1. However, the facts in
Eisler are distinguishable from those in the instant case. In
Eisler, both the payor and the payee had a mutual understanding
as to the reason for the settlement payment and the intent of the
release instrument. In the instant case, the payor did not
intend for the payment to be made for personal injuries at the
time the Settlement Term Sheet was agreed to. There has been no
factual showing that either Mr. Boyle or Ormet intended any of
the payments, at the time of the signing of the Settlement Term
Sheet, to be for personal injuries.
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