Georgia law recognizes that oral contracts falling outside the purview of the Statute of Frauds may be binding and enforceable. Even complex or expensive contracts may be oral, as long as the evidence establishes the parties' mutual assent to all essential terms of the contract.
Turner Broadcasting System, Inc. owned Atlanta Hawks and Atlanta Thrashers sports teams and the operating rights to Philips Arena. In October 2002, Turner publicly announced its interest in selling the aforementioned assets as part of a "deleveraging program" to reduce its mounting debts. In November 2002, David McDavid expressed an interest in buying the assets and entered into negotiations with Turner. On April 30, 2003, the parties executed a "Letter of Intent," outlining the proposed sale terms and establishing a 45-day exclusive negotiating period. On June 14, 2003, the Letter of Intent expired with no agreement, but the parties continued to negotiate. On or about September 12, 2003, McDavid and Turner verbally reached a final agreement regarding the terms of the sale. However, on September 15, 2003, McDavid received a phone call informing him that Turner has sold the assets to another corporation, the Atlanta Spirit. Feeling stunned and disappointed, McDavid filed suit against Turner, alleging claims of breach of an oral contract to sell the assets, promissory estoppel, fraud, and breach of a confidentiality agreement. Following an eight-week trial, the jury returned a verdict in favor of McDavid on the breach of oral contract claim and awarded $ 281 million in damages. On appeal, Turner denied the existence of any binding agreement, arguing that the parties had not executed a final written purchase agreement and had continued to negotiate the material terms of the transaction, and thus, the trial court erred in deciding in favor of McDavid.
Was there a binding oral agreement?
The appellate court noted that the evidence was highly contested, but that 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, the appellate court ruled that 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 the seller found another buyer. The court further found that the damage award was within the range of the evidence, and thus, that there was no basis for reversal.