Arnold Palmer Golf Co. v. Fuqua Industries 1976 6th Cir. Facts: Palmer industries wanted to engage in the manufacturing of golf clubs by establishing a relationship with Fuqua industries. The two companies met and conferred on terms of an agreement. A six page memorandum on intent was developed and signed by each of the companies. Fuqua released a press notice of the new formation yet soon later informed Palmer CO. that the relationship would be terminated. Palmer filed suite. Initial Court Ruling: Summary judgment on favor of the defendant
Rules: Two parties can remain immune to a binding obligations even if they have agreed in terms orally or informally, however, if they did have expressed intentions to be bound by a formal document then they can be found obligated to the terms of the agreement. “The matter is merely of expressed intention.” Corbin If parties have come to an agreement of terms and that these agreed upon terms will be shown in a contract then the formal contract is merely a formality. The agreed upon terms that will be later included in a contract are then binding. Issues: Can a court rule for summary judgment in a contract case when there is a binding relationship in question? Does a letter of intent form a binding contract?
Reasoning: The reversed the summary judgment in favor of the plaintiffs on the grounds that the circumstances needed factual considerations. The potential for a contract to be formed was present with the sigining of a memorandum of intent. However, as to the question of whether the intent formed a contract was of factual issue. The court ruled the court needed to consider the factual questions of the case.
Further; In the trial court the judge ruled that they were not bound by the memorandum and that they were not bound. Factual issue is whether the parties involved intended to enter into a binding contract