The Tennessee Supreme Court has issued an opinion in the case of Pharma Conference Education, Inc. v. State, rejecting the State of Tennessee's claim that its contract with Pharma was unenforceable due to being illusory. The court found that Pharma’s promise to provide as many continuing education programs “as is feasible” constituted a real obligation and adequate consideration for the contract.
This legal dispute revolved around a written agreement where Pharma, a provider of pharmaceutical continuing education programs, committed to offering the University of Tennessee Health Science Center as many programs "as is feasible." However, before any programs were conducted, the State terminated the agreement, leading Pharma to sue for breach of contract.
The State contended that the contract could not be enforced because Pharma did not provide consideration—a necessary element for enforceability where both parties must offer something of value. The Supreme Court reviewed whether Pharma's promise qualified as adequate consideration and concluded affirmatively.
Under section 47-50-102 of the Tennessee Code, a signed written contract presumes consideration exists. The State attempted to rebut this presumption with two arguments. First, it claimed that the term “feasible” allowed Pharma too much discretion in deciding whether to hold a program, rendering its promise illusory. The court disagreed, noting feasibility depends on objective factors like venue and speaker availability and resource constraints—not solely on Pharma's judgment.
Secondly, the State cited deposition testimony from Pharma’s president suggesting he believed in having complete discretion over program creation. The court dismissed this evidence as irrelevant for interpreting contractual terms and barred by the parole evidence doctrine from altering or contradicting those terms.
Ultimately, the court ruled against the State’s assertion that lack of consideration made the contract unenforceable. Chief Justice Kirby agreed with this decision but wrote separately to clarify that while initial admission of deposition testimony might have been possible, it should not alter contractual terms.