Contracts Outline spring

Contracts Outline spring - Contracts Class Outline I....

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Contracts Class Outline I. AGREEMENTS TO AGREE a. General Rule : Agreements to agree (memos/letters of intent) binding on parties if parties intended them to be. Different Standards: i. Empro v. Ball-Co : “Intent” is objective & must be determined solely from the language when no ambiguity in its terms exist (therefore, MSJ appropriate when language is unambiguous as to intent of parties). ii. Arnold Palmer : Whether parties had intent to form K is a question of fact iii. Joseph Martin Deli : A mere agreement to agree, in which a material term is left for future negotiations, is unenforceable. iv. Restatement 27 : Manifestations of assent that are in themselves sufficient to conclude a K won’t be prevented from operating by fact that parties also manifest intention to prepare & adopt written memorial thereof, but the circumstances may show that agreements are preliminary negotiations. 1. Comment A : Parties often finalize all K provisions prior to actual final writing – in these circumstances, they have formed a K. 2. Commend B : If a party knows (or has reason to know) that other party regards agreement as incomplete & intends that no obligation shall exist until other terms are assented to or until whole has been written, then preliminary negotiations don’t constitute a K. 3. Comment C : Factors to consider: extent to which agreement has been reached on all terms to be included; whether K is type usually put in writing; whether it needs formal writings for full expression; amount of detail; whether amount involved large or small; common or unusual K; whether standard form of K is widely used in similar transactions; whether either party takes any action in preparation for performance during negotiations, etc. b. Cases: i. Empro v. Ball-Co : P sends letter of intent to D proposing $2.4M purchase of inventory. Letter states that it is subject to formal, definite agreement signed by both parties. Letter makes purchase subject to satisfaction of definite agreement & approval of P’s BOD. Letter signed by both parties. When negotiations break down, P sues D claiming that letter bound D to sell only to P. 1. Holding: “Intent” is objective & must be determined solely from language when no ambiguity exists. Letter of intent in this case clearly shows that the parties weren’t bound. ii. Arnold Palmer v. Fuqua : Parties intend to merge. Parties sign memo of intent which states that lawyers would draft final agreement acceptable to both parties & that obligations were subject to preparation of definite agreement satisfactory to both parties & approval of definite agreement by D’s BOD. D informs P that transaction was terminated & P sues for breach K. D claims 1
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that memo was not binding. Trial court grants SJ to D, determining parties weren’t bound by memo. 1.
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This note was uploaded on 03/22/2009 for the course JURI 4250 taught by Professor Carlson during the Spring '07 term at University of Georgia Athens.

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Contracts Outline spring - Contracts Class Outline I....

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