CHARLES FRIED: Let me give you one more actual example.
Some of you may know that Comcast and Time
Warner have agreed that Comcast would acquire Time Warner's cable
business at a particular price.
As with Getty and Pennzoil, there were many details to work out.
Not least of which was how to deal with the government, which
may try to block the deal because it would
make Comcast too big, too powerful.
And that would be bad for competition,
Maybe to satisfy the government, Comcast would
have to leave some part of Time Warner's assets
out or sell them to a third party.
Such things were left up in the air.
But in the meantime, both Time Warner and Comcast
have spent millions, 10s of millions of dollars,
on lawyers' fees, accountants' fees, fees to financial advisors,
getting the agreement of all kinds of third parties they dealt with,
their investors, their banks, and so on.
What if tomorrow Time Warner calls up Comcast and says,
in the words of the Gershwin song, let's call the whole thing off?
Should Comcast be able to sue?
Is it in the position of Pennzoil or in the position of the Hoffman's?
These cases are different from the situation
of Sister Antillico in Kirksey and Kirksey,
or of the nephew in Hamer and Sidway, or of grandpa and his granddaughter.
In all of those, there was a very definite promise.
It was even in writing.
The only issue was whether it was part of a bargain,
whether each side has promised to give something in return
for what the other had promised.
With Hoffman, not just with Getty and Pennzoil, or Comcast and Time Warner,
there is no question that the parties were negotiating to conclude a bargain.
No one was making a gift here.
But the law's dilemma is, how far should it
insist that the parties have gone before the judge or a jury, a Texas jury,
concludes that if they pull out, they can be sued for that?
In Hoffman's case, it might seem fair to say
that this little guy had been strung along by Red Owl
and should be compensated for what he lost.
The money he lost in selling the bakery and moving his family and so on.
But Pennzoil, Comcast?
Surely they should be left to take care of themselves.
Well, if the courts take too hands off an attitude in such cases,
parties who should get together may be afraid to invest
in the lawyer's fees and all the preliminary expenses
necessary for reaching a final agreement,
fearing they might be left high and dry.
But if the courts intervene too early, before there
is anything that looks like a final deal,
and the court say there is a contract at an early stage--
as they did with Texaco, Pennzoil, and Getty--
then parties will be afraid even to flirt with each other.
Fearing that just because they held hands in the movie theater,
the court will pronounce them man and wife.
So it is, as usually the case in the law, a delicate balance.