PFT Roberson, Inc. v. Volvo Trucks N. Am., Inc.

420 F.3d 728 (7th Cir. 2005)

 

RULE:

When negotiators say that an agreement is subject to a more definitive document, Illinois treats this as demonstrating intent not to be bound until that document has been prepared and signed. Illinois is averse to enforcing tentative agreements that are expressly contingent on the signing of formal or final documents.

FACTS:

A truck fleet operator and truck company and a related transportation services company entered into negotiations concerning a fleet agreement. Although a number of lengthy draft agreements were exchanged, none of them were ever signed. The operator alleged that a 572 word e-mail message constituted a contract between the parties, that the truck company and a related transportation services company had breached that contract. They had engaged in fraud by attempting to change the terms of the contract after the message was sent. The district court submitted only the breach of contract issue to the jury; it found in the operator's favor. The case was appealed to the United States Court of Appeals for the Seventh Circuit.

ISSUE:

Do unsigned contracts and related long and detailed emails constitute a contract?

ANSWER:

No

CONCLUSION:

No reasonable jury could conclude that the message, which recapped the parties' negotiations, identified items that had been agreed upon, and listed other items that needed to be reviewed and finalized, constituted a contract or that the agreed-upon items were independent bargains to which defendants bound themselves. It was unnecessary to consider the operator's fraud claim and the court held that the breach of contract issue should not have been given to the jury and that the dispute should have been resolved by the entry of summary judgment in defendants' favor. The parties were negotiating a comprehensive arrangement, not a series of stand-alone contracts.

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