In SIGA Technologies, Inc. v. PharmAthene, Inc., No. 314, 2012 (Del. May 24, 2013), the parties engaged in negotiations for a merger agreement and a separate license agreement regarding a developmental drug. The parties agreed on a non-binding term sheet for the license agreement, and proceeded to execute agreements that provided that even if the merger failed to close, the parties would continue to negotiate toward a final license agreement “in good faith” and in accordance with the terms of the term sheet. The merger fell through, and plaintiff subsequently presented defendant with a draft license agreement that was consistent with the agreed-upon term sheet. Defendant, however, refused to sign it and, instead, proposed “drastically different” terms. Negotiations broke down, and plaintiff sued. Following a bench trial, the court found that defendant had breached its duty to negotiate the license agreement in good faith. In affirming, the Delaware Supreme Court held that an express contractual obligation to negotiate in good faith is enforceable and binding on the parties. The court found that although the license agreement term sheet was itself non-binding, the parties’ subsequent agreements to negotiate in good faith were binding, and because those agreements expressly referenced and incorporated the term sheet, they required the parties to negotiate toward an agreement with substantially similar terms. Concluding that the record showed that defendant not only demanded terms that were substantially dissimilar from the term sheet, but did so in bad faith, the court affirmed the chancery court’s finding that defendant had breached its obligation to negotiate in good faith.