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R.G. Group, Inc. v. Horn & Hardart Co.

R.G. Group, Inc. v. Horn & Hardart Co.

United States Court of Appeals for the Second Circuit

September 20, 1984, Argued ; December 11, 1984, Decided

No. 84-7342

Opinion

 [*70]  PRATT, Circuit Judge:

Plaintiffs R.G. Group, Inc. and R.G. Restaurant Associates appeal from a judgment of the United States District Court for the Southern District of New York, Mary Johnson Lowe, Judge, granting defendants' motions for summary judgment in an action based on breach of contract and promissory estoppel. Plaintiffs claim to have made an oral agreement with the defendants, Bojangles' of America, Inc., and its parent corporation, The Horn & Hardart Company, in which plaintiffs gained the exclusive right to develop and operate some twenty "Bojangles' Famous Chicken 'N Biscuits" fast-service restaurants in the [**2]  southern half of Houston, Texas. Defendants deny that such an agreement was ever concluded. In granting summary judgment for defendants, the district court determined that the parties had intended to be bound only by a written contract, and that no written contract was ever executed; that the alleged  [*71]  oral agreement was, in any event, subject to the statute of frauds, and that the statute of frauds was not satisfied by the writings put forward by the plaintiffs; and that there was nothing to support a claim based on promissory estoppel. We affirm.

Under our law of contracts parties are free, within certain limits, to set the conditions under which their agreements will become binding. Sometimes an oral promise or handshake is all that is needed, but when substantial sums of money are at stake it is neither unreasonable nor unusual for parties to require that their contract be entirely in writing and signed before binding obligations will attach. In the present case the parties set exactly that requirement, and they did so in such a forthright, plain manner that there is no issue left to be tried. The case does not even present much of a cautionary tale: its lesson is simply [**3]  that when experienced businessmen and lawyers are told explicitly and clearly that a major and complex agreement will be binding only when put in writing, then they should be rather cautious about assuming anything different.

I. BACKGROUND

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751 F.2d 69 *; 1984 U.S. App. LEXIS 16001 **

R.G. GROUP, INC., and R.G. RESTAURANT ASSOCIATES, Plaintiffs-Appellants v. THE HORN & HARDART COMPANY, and BOJANGLES' OF AMERICA, INC., Defendants-Appellees.

Prior History:  [**1]   Appeal from a judgment of the United States District Court for the Southern District of New York, Mary Johnson Lowe, Judge, granting defendants' motions for summary judgment.

Disposition: Affirmed.

CORE TERMS

parties, territory, franchise, franchise agreement, district court, promise, restaurants, oral agreement, telephone, binding, telephone conversation, written agreement, negotiations, franchisee, memorandum, contracts, promissory estoppel, summary judgment, plaintiffs', provisions, partial, statute of frauds, oral contract, standard form, modification, partnership, bargaining, deposition, handshake, signal

Business & Corporate Compliance, Contracts Law, Types of Contracts, Contracts Implied in Fact, Civil Procedure, Settlements, Settlement Agreements, General Overview, Contracts Law, Contract Interpretation, Standards of Performance, Partial Performance, Oral Agreements, Unilateral Contracts, Summary Judgment, Entitlement as Matter of Law, Judgments, Motions for Summary Judgment, Opposing Materials, Appropriateness, Genuine Disputes, Legal Entitlement, Materiality of Facts, Contract Formation, Execution & Delivery, Statute of Frauds, Consideration, Promissory Estoppel