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Turner Broad. Sys. v. McDavid - 303 Ga. App. 593, 693 S.E.2d 873 (2010)


To constitute a valid contract, there must be parties able to contract, a consideration moving to the contract, the assent of the parties to the terms of the contract, and a subject matter upon which the contract can operate. 


The parties were negotiating a sale to sell two sports teams and the operating rights to a sports arena. They executed a letter of intent outlining the proposed sale terms, and they continued to negotiate when the letter of intent expired without an agreement. After a certain conference call, the CEO of the seller, Turner Broadcasting System, Inc. (“Turner”), announced that the parties had a deal. Thereafter they exchanged multiple drafts of the purchase agreement. While continuing to exchange purchase agreement drafts with David McDavid, Turner began negotiations with a new entity. The same day that Turner again announced to McDavid that "the deal is done," that Turner signed a contract with the other entity. McDavid filed a case for breach of contract. The jury entered a verdict of $ 281 million in favor of McDavid, including damages, and the trial court denied Turner’s motions for judgment notwithstanding the verdict, or in the alternative, for a new trial. Turner sought review of a decision of the trial court.


Was there a valid contract and a breach of that contract?




The Court noted that although the evidence was highly contested, there was evidence supporting the jury's verdict. In particular, the parties' expressions and conduct, including the letter of intent and statements that there was a deal, demonstrated an intent to be bound. In addition, there was sufficient evidence for the jury to find that there was agreement upon all material terms such that a binding oral agreement had been reached before Turner found another buyer. Moreover, the Court found that the damage award was within the range of the evidence, and thus, that there was no basis for reversal.

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