An agreement to enter into an agreement upon terms to be afterwards settled between the parties, is a contradiction in terms, and amounts to nothing.
The parties negotiated for the sale and purchase of all the stock in the seller's company. The parties consulted an attorney, who produced a letter agreement signed by both parties, which set forth the agreement to sell and the terms of the purchase price. The attorney and the buyer both testified that it was their understanding that the letter agreement was not binding. The buyer further asserted that there were many details to the sale that were still be determined and that time was of the essence. The trial court denied the request for specific performance, but awarded damages for the seller's reliance on the buyer's promise.
Is the remedy of specific performance available to enforce an agreement insufficient in terms because it was evidenced only by a letter of intent?
The court agreed that the agreement was not sufficiently definite to merit specific performance. The court further found that the seller was not entitled to any damages because the seller had not taken any action or forbearance of a definite and substantial character based on the agreement. The court noted that there was only a 17-day time period between the signing of the agreement and the buyer's notice of termination and that the seller could only testify with certainty that he missed opportunities to bid on two contracts during that time period.