In many jurisdictions any issuance of stock or of right to 
receive stock must be approved by board. If board approved 
at $.07 then I don't think that the officers entered into 
binding contract when they offered $.05. Any promissory 
estoppel claim would be limited to out-of-pocket reliance 
damages, which may be nil. Great hypo. OK if I use it in 
next edition of Mangers and Legal Envir?

Connie

On Fri, 16 Jun 2006 15:21:18 -0400
  "White, Nancy Jean" <[log in to unmask]> wrote:
> Looks like a unilateral mistake to me - no reformation. 
>If the mistake were obvious then there could be relief 
>but this is not an obvious mistake. If the contract were 
>impossible or practicably impossible (commercial 
>senselessness) then there could be relief - but again, 
>these theories do not apply.
> 
> On the other hand firing an employee who tries to 
>enforce the contract is probably not a form of illegal 
>discrimination nor is the employee protected by 
>whistleblower law. So, the employee can try and enforce 
>the agreement and if management wants to it can fire said 
>employee. 
> 
> Nancy J. White
> Department of Finance and Law
> Sloan 329
> Central Michigan University
>  
> CMU Webpage: http://faculty.cba.cmich.edu/webs/white2nj/
> CMU office: 989-774-1842
> CMU fax: 989-774-6456
> CMU email: [log in to unmask]
> 
> Campaign website:
> http://nancywhiteforsenate.net/
> 
>Fax: 989-956-5920
>  
> 
> -----Original Message-----
>From: Academy of Legal Studies in Business (ALSB) Talk 
>[mailto:[log in to unmask]] On Behalf Of DANIEL 
>HERRON
> Sent: Friday, June 16, 2006 2:31 PM
> To: [log in to unmask]
> Subject: Re: contracts question
> 
> If it can be verified (and I am assuming it can be) that 
>this is a legit
> mistake and miscommunication, couldn't the rules 
>regardingmistake be
> used to reform   the contract, especially is the $.02 
>difference is
> deemed immaterial.....
> 
> Dan
> 
>>>> [log in to unmask]  >>>
> ALSBer's -- 
> 
> Here's a basic contract question --  I welcome your 
>thoughts on it.  A
> friend of mine started a new job in March -- as part of 
>his hiring, he
> signed a stock option grant agreement giving him 80,000 
>shares of stock
> at the option price of $.05 per share;   yesterday, 3 
>months after
> signing the stock option agreement, he received the 
>following Email 
> from the VP of Finance and Operations:
>     * * *
> "Subject:        New Stock Option paperwork 
> 
>   Due to an administrative error following the March 
>board meeting,
> all grants
> were shown at a price of $.05 instead of the Board 
>approved $.07 per
> share.
> I have the corrected paperwork in my office to hand out. 
>   When you
> get a
> chance, please come by to pick this up (assuming I'm 
>around).    I can
> then
> answer any questions you might have prior to signing. 
>   I should be in
> my
> office from 3:45pm, onward, today."
> 
>   * * *
> As I read it , the original option grant is  valid and 
>binding, and
> the company must be willing to offer some additional 
>consideration in
> return for the employee's agreement to revise the terms 
>of the original
> option grant  (which will cost the employee $1600).  
>  Of course , the employee is an at-will employee, and 
>conceivably
> could be fired for refusing to sign the revised option 
>agreement; 
> fortunately for the employee, though, this takes place 
>in New Jersey,
> and the NJ courts recognize the implied covenant of good 
>faith and fair
> dealing in employment at will contracts.
>          Your comments, please.   
>                                             Thanks, 
>  Pat Cihon

Constance E. Bagley
Associate Professor of Business Administration
Harvard Business School
Soldiers Field
Boston, MA 02163
617.495.6963 {v)

Assistant: Jeremy Fox
            617.496.9629