Thursday, December 26, 2013

A/S Apothekernes Laboratorium For SpecialPraeparater v. I.M.C. Chemical Group, Inc. case brief

A/S Apothekernes Laboratorium For SpecialPraeparater v. I.M.C. Chemical Group, Inc. case brief summary
873 F.2d 155 (1989)

CASE SYNOPSIS
Plaintiff appealed from a judgment of the United States District Court for the Northern District of Illinois, Eastern Division, in favor of defendants, arguing that defendants breached the duty to negotiate the sale of the biochemical division of their company in good faith.

CASE FACTS
Plaintiff and defendants negotiated for several months in an attempt to reach an agreement on the terms of the sale of defendants' biochemical division. Finally, the parties agreed on all the terms. However, defendants' board of directors refused to approve the deal. Plaintiff filed a diversity action asserting state law claims for breach of contract, fraud and estoppel. The trial court entered judgment in favor of defendants on all of the counts and plaintiff appealed.

DISCUSSION

  • The court affirmed the judgment of the trial court because there was no contract for the sale of defendants' biochemical division to plaintiff and, therefore, no breach of contract. 
  • Although defendants did agree to negotiate in good faith, they did not breach that duty. 
  • A duty to negotiate in good faith does not encompass an automatic duty to approve the final deal.
CONCLUSION
The court affirmed the judgment for defendants because there was no contract for the sale of defendants' biochemical division to plaintiff and, therefore, no breach of contract. A duty to negotiate in good faith does not encompass an automatic duty to approve the final deal.


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