882 F.2d 411
Appellant buyer challenged an order of the United States District Court for the District of Oregon, which granted summary judgment for appellee seller in appellant's action claiming breach of contract in the sale of stock.
OVERVIEW: In a diversity action, appellant buyer brought an action against appellee seller, claiming breach of contract in the sale of stock. The district court granted summary judgment for appellee.
-Plaintiff contacted the Defendant, expressing interest in buying stocks of Defendant’s subsidiary, Bear Tooth Coal Company.
-The Plaintiff wrote Defendant a letter with the offer, terms and conditions, and an elaborate acceptance procedure for the Defendant.
-The Defendant returned the letter with changes to some of the terms and conditions.
-Defendant wrote Plaintiff a letter, saying the offer, 2,000,000.00 for the stocks was inadequate and asked if Plaintiff would instead consider paying 2,750,000.00 for the stocks.
-Defendant invited the Plaintiff to “resubmit” his offer.
-The Plaintiff wrote the Defendant a letter, signed by the Plaintiff, which was captioned “Acceptance of Offer”.
-The Plaintiff entered into a contract with a third party to sell coal from Bear Tooth.
-The Defendant then decided to not go through with the deal.
-The Plaintiff sued Defendant on the basis of breach of contract, and alternatively on the grounds of equitable estoppel.
The appellate court affirmed, holding that the exchange of letters between appellant and appellee did not satisfy the statute of frauds.
-In so ruling, the appellate court noted that the letter upon which appellant acted was not an offer, but was merely an invitation to continue negotiations.
-The letter plainly stated that appellee remained "receptive to an offer."
-The letter referred to another commitment appellee had for the sale of the stock, implying that it would have to free itself from that commitment before undertaking another.
-Further, appellee's letter also specified the manner in which the deal would be closed.
-Finally, appellee's letter concluded, not with an offer to close the deal, but with an invitation that appellant resubmit an offer.
OUTCOME: The appellate court affirmed the district court's grant of summary judgment to appellee seller in appellant buyer's action claiming breach of contract in the sale of stock because the exchange of letters between the parties did not satisfy the statute of frauds, as no firm offer was made.
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