Boston University Must Face Trial on Oral Contract Claim Made by Former Research Scientist
Boston University Must Face Trial on Oral Contract Claim Made by Former Research Scientist

In Kirk Ramey v. Trustees of Boston University, et al., Judge Krupp, sitting in the Business Litigation Session, ruled that Ramey, a former BU research scientist, was entitled to a trial on his claim that defendants, BU and Dr. Edward Damiano, breached an oral agreement to provide Ramey an equity stake in Beta Bionics, a medical device company.

The oral contract, Ramey alleges, arose from two conversations he had with Dr. Damiano, a BU biomedical engineering professor. One of the conversations took place before Ramey accepted a position in Dr. Damiano’s lab. Dr. Damiano did not dispute that the conversations took place, but denied that he had agreed to give Ramey an equity interest in Beta Bionics, which had not yet been formed when Ramey began work. Neither conversation was memorialized in writing.

BU and Dr. Damiano sought summary judgement on the contract claim, arguing that the alleged promise of equity did not contain sufficient material terms to create a contract. BU also argued that Dr. Damiano had acted in his individual capacity and not as BU’s agent, and thus lacked the power to bind the school.

Judge Krupp disagreed. Relying on Situation Management Systems, Inc. v. Malouf, Inc., 430 Mass. 875 (2000), Judge Krupp ruled:

To have a binding agreement, the parties ‘must…have progressed beyond the stage of ‘imperfect negotiation,’ although ‘the presence of undefined or unspecified terms will not necessarily preclude the formation of a binding contract.’ When ‘agreement on all of the essential terms’ of a contract exists between the parties who are to be bound by it, there is an enforceable contract.

The parties agree that the March 2013 phone call between plaintiff and Damiano consisted of a conversation regarding plaintiff’s potential equity stake in the yet-to-be-formed company, but dispute the specificity of the terms agreed upon, and whether the plaintiff could reasonably understand whether Damiano was acting in his individual capacity or had apparent authority to negotiate on behalf of BU. Where the existence and terms of an oral agreement are factually disputed by the parties, the enforceability and provisional contents of the agreement are questions of fact that are ‘generally reserved for the jury.’

Judge Krupp also ruled that whether Dr. Damiano had apparent authority to bind BU was a fact question for trial:

Given that during the March 2013 conversation Damiano offered plaintiff annual compensation by BU of $125,000, and BU’s willingness to stand behind that offer, the inference may be drawn from the summary judgment record that it was reasonable for plaintiff to conclude that Damiano was acting as BU’s authorized agent.

Review Judge Krupp’s decision.

The Business Litigation Session of Superior Court:

Docket Number: 18-3240-BLS1

Case Name: Kirk Ramey v. Trustees of Boston University, & others  

Date of Decision: April 20, 2022

Judge: Peter B. Krupp, Justice of the Superior Court

Justice: Justice Krupp

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