Azer Scientific v. Quidel: Third Circuit Confirms that Definitive E-Mail Exchanges Can Form Binding Contracts under Pennsylvania Law

Introduction

The Third Circuit’s decision in Azer Scientific LLC v. Quidel Corp. (Aug. 12, 2025) addresses a recurring twenty-first-century contracting scenario: can a series of concise, business-to-business e-mails constitute an enforceable supply contract even though the parties plan to reduce the deal to a more formal writing later? The Court answered “yes,” affirming an $8.5 million jury verdict for Azer and clarifying Pennsylvania contract doctrine in the digital-communications age.

The dispute arose during the COVID-19-testing boom. Quidel Corporation, an in-vitro diagnostics company, sought millions of reagent-filled tubes for its at-home test kits. Azer Scientific, a medical consumables supplier, offered to fill the tubes. After rapid e-mail negotiations on March 25, 2021, Azer immediately bought specialized machinery, but Quidel later “ramped down” production and never completed the formal purchase order or supply agreement. Azer sued for breach; the district court granted partial summary judgment on contract formation and the jury found damages of $8,521,609. Quidel appealed, contending no contract ever arose.

Summary of the Judgment

A unanimous two-judge majority (Judge Shwartz, joined by Judge Matey) held:

The March 25, 2021 e-mail exchange contained all essential terms (product, quantity, price, duration) and objectively demonstrated mutual intent to be bound.
Under Pennsylvania law, parties may form a contract even while contemplating a later, more detailed document; definiteness of essential terms, not formality, controls.
Because no genuine issue of material fact existed, the district court properly granted Azer summary judgment on contract formation, leaving only breach and damages for the jury.
The $8.5 million verdict therefore stands.

Judge McKee concurred in part and dissented in part, arguing that unresolved issues (e.g., termination fee) created a jury question on intent, so summary judgment should have been denied.

Analysis

1 Precedents Cited and Their Influence

ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659 (3d Cir. 1998)
Channel Home Centers v. Grossman, 795 F.2d 291 (3d Cir. 1986)
American Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575 (3d Cir. 2009)
Field v. Golden Triangle Broad., 305 A.2d 689 (Pa. 1973)
Lombardo v. Gasparini Excavating, 123 A.2d 663 (Pa. 1956)
Greene v. Oliver Realty, 526 A.2d 1192 (Pa. Super. 1987)
Yellow Run Coal v. Alma-Elly-Yv Mines, 426 A.2d 1152 (Pa. Super. 1981)

ATACS and Channel Home supply the three-part test for contract formation: (1) mutual manifestation of intent; (2) sufficiently definite terms; (3) consideration. The Court applied this matrix verbatim.
American Eagle provides the modern articulation that parties may bind themselves while expecting to memorialize terms later—it directly underpins the holding that emails alone can create a contract.
Field, Lombardo, and Greene emphasize that absence of ancillary provisions does not defeat contract formation if a reasonable court can supply them or they are not essential. The majority relied on these to discount unresolved quality-control and insurance clauses.
Yellow Run Coal supports the inference of intent from partial performance; Azer’s $290k equipment purchase and Quidel’s signed (though later withdrawn) purchase order mirrored the facts in Yellow Run.

2 Legal Reasoning

a) Definiteness of Terms

The Court deemed quantity (10 million fills/month for 12 months), price (tier pricing in Azer’s quote), product (prefilled reagent tubes), and duration (one year) as the “essential terms” for this supply contract. Because those specifics appeared in the March 25 emails, the agreement satisfied Lombardo’s definiteness requirement.

b) Manifestation of Intent

Objective manifestations ruled. Azer explicitly asked, “Please confirm in writing that we are approved to order the equipment and that we have your commitment,” and Quidel answered, “Please use this note as confirmation that we will be moving forward with the 2.5M/week commitment.… We are working on the purchase order now.” Judge Shwartz labelled this “textbook” assent, emphasizing that Quidel knew how to withhold assent (it had done so earlier) but chose not to on March 25.

c) Summary Judgment Posture

Applying Matsushita, the majority held no reasonable juror could find against contract formation given these undisputed writings and the subsequent behavior (purchase of equipment, draft P.O.). Thus, the district court properly resolved formation as a matter of law.

d) Addressing the Dissent

Judge McKee’s dissent spotlighted a possible “meeting of the minds” gap on a termination fee—a term that could be material for a volatile pandemic-driven supply chain. The majority responded that Field and Greene permit courts to supply reasonable missing terms and that the emails’ focus on swift production outweighed the lack of a fee clause.

3 Impact on Future Cases and Commercial Practice

Strengthened Evidentiary Weight of Emails
The decision signals that in Pennsylvania, detailed commercial emails can suffice for contract formation even where the parties anticipate a later, more polished agreement. Businesses must treat high-stakes emails as potentially binding instruments.
Risk Allocation for Rapid-Response Industries
Suppliers and buyers in fast-moving markets (e.g., biotech, PPE, tech hardware) should incorporate “subject to contract” qualifiers or conditional language if they wish to avoid inadvertent commitment.
Litigation Streamlining
By reaffirming that contract formation is often a legal question on undisputed writings, the ruling encourages summary adjudication, reducing expensive trials over intent when the documentary record is clear.
Template Revisions
Companies may revisit internal approval processes and purchase-order protocols to ensure that preliminary communications do not outpace governance safeguards.
Precedential Value
Although marked “Not Precedential,” Third Circuit non-precedential opinions hold persuasive weight in district courts nationwide and, under Fed. R. App. P. 32.1, may be cited. The clarity of the reasoning suggests it will influence contract-formation analyses well beyond Pennsylvania.

Complex Concepts Simplified

Manifestation of Assent – The outward expression (words, emails, conduct) that shows a party agrees to be bound, regardless of undisclosed internal intentions.
Definiteness – A contract must specify enough essential terms—typically subject matter, quantity, and price—so a court can enforce it without guessing.
Consideration – Something of value exchanged by each party. Here, Azer’s tube-filling commitment and Quidel’s promise to buy provided consideration.
Summary Judgment – A procedural device allowing courts to decide disputes without trial when no material fact is genuinely contested and one side is entitled to judgment as a matter of law.
“Subject to Contract” Clauses – Language expressly stating that parties are not bound until a formal agreement is executed; absence of such language weighed heavily against Quidel.

Conclusion

Azer Scientific v. Quidel crystallizes an important modern contracting rule: precise and affirmative e-mails can create binding obligations under Pennsylvania law even if parties plan to sign a more elaborate document later. The Court’s application of established precedent to twenty-first-century communications underscores the enduring relevance of classical contract principles—offer, acceptance, consideration, and intent—regardless of medium. Businesses that negotiate complex deals through email should heed the warning: clarity about when a deal is (or is not) final is indispensable. In the broader legal landscape, the decision will likely be cited as persuasive authority whenever courts consider whether an electronic exchange crossed the threshold from negotiation into enforceable contract.