Reference no: EM13338420
Facts: EvergreenInvestments, a Montana company, was negotiating for two years tobuy FCL Graphics, a commercial printing firm located inIllinois. The parties signed a letter of intent (LOI) thatincluded a purchase price of $53 million, payment terms, and theprecise assets involved.
The letter also stated that “binding terms and conditions fora potential transaction will depend on a number of factors,including but not limited to, the satisfactory completion of legal,business and financial due diligence investigations, andnegotiation and execution of definitive legaldocumentation. Any proposed transaction will be subject toEvergreen's ability to arrange financing, on terms satisfactory toEvergreen, sufficient to consummate the acquisition and provideadequate working capital to meet the Company's on-going liquidityrequirements and other obligations.”
Consummation of the sale was also contingent on Evergreenobtaining satisfactory financing, the receipt of certain approvals,and Evergreen’s completion of due diligence. One monthafter signing the LOI, FCL terminated negotiations. Evergreensued for breach of contract. The trial court granted summaryjudgment for FCL, ruling that the letter of intent was not abinding agreement. Evergreen appealed.
You Be the Judge: Wasthe letter of intent a binding agreement? Why?