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Mini Melts USA, Inc. v. Mini Melts, Inc. - No. 3:15-cv-01704 (JAM), 2017 U.S. Dist. LEXIS 150541 (D. Conn. Sep. 18, 2017)

Rule:

It is a venerable principle of contract law that an "agreement to agree" does not itself constitute an enforceable agreement. That is true notwithstanding the parties' best of intentions that they will reach an agreement one day. Just as the freedom of contract allows parties to agree to be bound by an agreement, it equally allows for the parties to agree that they will not be bound unless they enter a future agreement.

Facts:

Plaintiffs Mini Melts USA sued defendants Mini Melts, Inc. for breach of contract and breach of the implied covenant of good faith and fair dealing. The parties previously entered into a Manufacturing and Distribution Agreement (MDA). Under this MDA, plaintiffs became the exclusive manufacturer and distributor of Mini Melts within the United States. When they sent a letter terminating the MDA, defendants rejected it, arguing that the MDA's termination-by-purchase clause was non-binding. The parties have filed cross-motions for summary judgment on both counts of the complaint, offering very different interpretations of the meaning and nature of their agreements.

Issue:

Does the termination by purchase clause of the MDA bind the parties in this case?

Answer:

No.

Conclusion:

The termination-by-purchase clause of the MDA did not bind the parties; because the language highlighted by plaintiffs is aspirational and conditional, it offers little support for plaintiffs' argument. To the contrary, language indicating that the parties "would like" to enter into a sale suggests the opposite—that no agreement had yet been made, but that the parties were hoping to execute one in the future, "subject to certain conditions and timing," the details of which are unclear.

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