Purchase Price Continues to Be an Essential Term for a Contract

Delcom Group, LP thought that it was the winning bidder for a project to install “Digital Classroom integration solutions with technology components including installation and service at multiple school facilities” in the Dallas Independent School District.  But when DISD dumped Delcom and went with the second-place bidder instead, Delcom sued both the school district and the competing bidder.  The trial court granted a temporary restraining order to prevent DISD and the competitor from using Delcom’s trade secrets, but ultimately denied a temporary injunction and granted the school district’s plea to the jurisdiction.  On interlocutory appeal from that ruling, the court of appeals affirmed.  Despite a chain of documents that Delcom pointed to as forming the contract, the court held that the contractor could not sue DISD for breach because the parties had never settled on the essential terms of a contract.  Among other problems, Delcom had actually submitted two different bids, one for $79 million and the other for $62 million — and DISD had never stated which bid it intended to accept.  Because the parties had not agreed on the essential terms of a contract, there could be no waiver of governmental immunity under section 271.152 of the Local Government Code.  The court likewise rejected Delcom’s takings claim, because there could be no taking when Delcom had given its alleged trade secrets to the school district voluntarily.  Finally, the panel affirmed the trial court’s denial of the temporary injunction, holding that Delcom had not established any imminent and irreparable injury through use of its trade secrets, nor had it shown it could not be compensated with money damages if any actual misappropriation were to occur.

Delcom Group, LP v. Dallas Independent School District, No. 05-11-01259-CV