Momenta Pharmaceuticals, Inc. (MNTA)

[investorgold2002]

Contractual law Implied terms & interpretation
-mouton,tinker,iwfal,rockrat your thoughts on this would be appreciated

Read page 82(starting "incomplete contracts & Contractual intent) and page 83

Here if AG withdraws say within week of launch or without any meaningful sale, then the contractual interpretation of "trigger of 2nd generic launch" can be called into question by MNTA. So in a sense the contract is incomplete. So contractual intent probably becomes important.
The obvious intent of the "trigger" was to reduce Momenta's %share of partnership profit with launch of second generic with the assumption that an entry of 2nd generic would reduce absolute partnership $ profit(market share of partnership's generic goes down as well as pricing). But if the AG is withdrawn within week then market share loss/pricing erosion have not happened.

http://encyclo.findlaw.com/4400book.pdf

BEGIN QUOTE
It is important to remember that all of these strategies involve presumptions.
It is all too easy for courts or proponents of a particular strategy to criticize the
alternatives as failing to hew closely enough to the parties’ intentions, when in
fact the parties’ intentions in incomplete contracts are at least uncertain, and
the question is which strategy is more likely to be successful at approximating
these intentions. For example, suppose a buyer rejects goods delivered late after
the market price drops below the contract price. A court might be called upon
to decide whether to imply a good faith limitation on the buyer’s ability to
reject. A textualist might argue no on the ground that such an implication
would be contrary to the parties’ intentions as expressed in the time of delivery
term. But the parties’ intentions - whether actual or hypothetical - may well be
that a good faith obligation should be implied rather than that the time of
delivery term should be interpreted as absolute. A proposition that textualism,
contextualism, penalty defaults, or joint maximization best represents the
parties’ intentions needs to be defended.

"Economic analysis can help to identify
the conditions under which the various interpretive strategies are more likely to approximate the parties’ intentions, and whether courts are better off pursuing a pure interpretive strategy or a mixed one"

END QUOTE