Contracts Ventura v. Zenith Facts: Zenith had a business that they were interested in selling. Ventura was a potential investment company that wanted to buy the company from Zenith. Situation of events: Ventura sends letter to ZDC wanting to buy company for 11 million. Merely a letter of intent. ZDC did not sign letter but sent a letter of their own saying they agreed “in principle” and willing to begin negotiations in good faith. Ventura sent a letter saying they agreed Rules: • “In principle” did not mean they agreed to any o the terms in the first letter. • Illinois law states that “agreements to negotiate toward the formation of a contract are themselves enforceable as contracts if the parties intended to be legally bound.” • Mirror Image Rule: common law that an acceptance of the offer has to match the terms of the offer. • A company cannot raise demands in a good faith negotiation solely to raise the demands higher than the other party can meet. They may however raise demands to meet market price criteria. Issues: Is agreeing to operate under “good faith” a binding contract? Did ZDC violate “the good faith” clause? Was a letter of intent exhaustive as to the rules of the contract as to leave out any third party? Reasoning: Ventura did not show that there was “clear error” on the part of ZDC and therefore the court could not overturn the previous rulings. ZDC was allowed to raise and lower the demands as they saw fit so long as they were doing it for profit and not to sink a deal. Ventura argued that it Further: • in the first letter the only thing that was binding was the good faith clause. In the first round of appeals Ventura’s argument was that the exchanging of nonidentical contract drafts during the negotiation had created a binding contract on the terms. -This failed under the mirror image rule Ventura’s second argument was that ZDC only pulled out of the negotiations when Heath’s (the company in question) fortunes improved. -There is no reason that they cannot raise price. Self interest is not wrong. Ventura is also saying that although they might have been approached by a third party it was not mentioned in the letter of intent, therefore not listed as part of the negotiation.