Courts overwhelmingly recognize the prize system as a contract will enforce it against the government

Michael Kremer and Rachel Glennerster, 2004, “Strong Medicine: Creating Incentives for Pharmaceutical Research on Neglected Diseases,” Princeton, https://www.jstor.org/stable/j.ctt1dr365r

A key step in moving forward is to design a commitment with sufficient credibility to provide investors with the reassurance they need before investing millions of dollars in research. We have discussed elsewhere various essential elements for building credibility—for example, having an independent adjudicating committee that developers trust. Another key element, however, is establishing a legally binding contract. The historical and legal record provides strong evidence that a suitably designed commitment will be interpreted by the courts as a legally binding contract (Morantz and Sloane 2001).1 Courts have ruled that publicly advertised contests are legally binding contracts, obligating sponsors to pay the winners according to their public announcements (Sullivan 1988). A contestant is judged to have formed a valid and binding contract with the promoter by performing the act requested by the sponsor. Sullivan cites a number of examples in which attempts to escape liability by changing the rules after a contestant has performed the desired act are treated as breaches of contract. Vaccaro (1972) notes that advertisements with certain specifications (e.g., identification of good, definite quantity of good) for the purchase of goods at specified prices have also been found to be legally binding. If the procedures in a contest stipulate the judge of the contest (the IAC in this case), decisions made by the judge are usually treated as final, if made in good faith. When the contest judge is an independent party, the courts almost universally hold the decision as final unless the decision was made in bad faith or the judges exceeded the authority specified in contest rules. A particularly interesting precedent was set in the 1960s, when the U.S. government used a contract offering to purchase manganese ore to stimulate domestic production. As part of the Domestic Manganese Purchase Program, the General Services Administration (GSA), a U.S. federal executive agency, issued regulations offering to purchase, at guaranteed minimum prices, “manganese ores that met the specifications detailed in the applicable regulations.” In Himfar v. United States (355 F.2d 606, Ct. Cl. 209 [1966]), the Federal Court of Claims enforced a unilateral contract under which the federal government agreed to purchase at the predetermined price all domestic manganese ore that met certain criteria specified in its contract. Morantz and Sloane (2001) note that this decision provides compelling evidence that a vaccine commitment would be readily enforced, even against the government.