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Jane T (LLC)
Jane T (LLC), Attorney
Category: Business Law
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Experience:  Worked in corporation's law department; business formations, formalities, and other business matters
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Discuss the reasoning of the court in the case of Itek Corp.

Customer Question

Discuss the reasoning of the court in the case of Itek Corp. v. Chicago Aerial Industries, Inc. (1968)



See: http://www.lectlaw.com/files/lws49.htm
My answer was:
The facts in the case indicate that the parties had "mutually assented" (an element of a binding contract that shows a "meeting of the minds has occurred") and that both, therefore, had already said they would let P buy D. Although certain parts of a contract may not be fully negotiated, such as date or price, when there is sufficient evidence that an agreement (a basic offer and acceptance) have been made, a court will hold that a contract existed, even if all terms were not fully yet agreed upon. It was a breach for D to violate that agreement and cancel the purchase by P. The teacher ask me: So is that what happened in Itek?
Submitted: 5 years ago.
Category: Business Law
Expert:  Jane T (LLC) replied 5 years ago.

DearCustomer

 

I worked on this answer for you the first time, and the answer is correct. The question "So is that what happened in Itek?" does not seem to say the answer is wrong, it merely asks for more information (or at least seems to ask for more information).

 

The answer is, yes, that is what happened in Itek. The facts show that after long negotiations, P and D signed a letter of intent that said they would both "make every reasonable effort to agree upon and have prepared as quickly as possible" a
contract so that P would buy D. However, shortly after this agreement, a third company offered D a higher price and D terminated the agreement saying it was due to "unforeseeable circumstances". The court said D could not do that because the letter of intent it signed was a contract that required it to act in agreement with the agreement to sell to P and that it could not change its mind simply because it got a "better offer." That was not acting in a way to "make every reasonable effort to agree" and was, in fact, a breach. Even though all terms, such as price and time had not been agreed upon, the parties had agreed on the essential term that P would buy D and that was binding.

 

 

Jane T (LLC), Attorney
Category: Business Law
Satisfied Customers: 8435
Experience: Worked in corporation's law department; business formations, formalities, and other business matters
Jane T (LLC) and 4 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.

MS. Jane T . I think you help me with another assignment. That I need help with I posted it. Can you please go back and look when you have the time I need that by tomorrow too the date on it should be 12/4/08. I really apprecaite it.

 

Thank you so much

 

Customer/p>

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