recognized in the running case instead we're here to asking the court to apply the standards of running and other california authorities and the application of those black letter standards results in a reversal of the district court's order granting summary judgment to don tar rennick recognized that normally letters of intent are considered to be non binding unless other circumstances indicate it also indicated that where a letter of intent a letter of intent may be considered binding where other evidence suggests that it may be binding pretty tough when the letter of intent has built in a back door out i agree if it was butterfly health that was the plaintiff here but m not a party to the letter of intent so in this particular case we have dom tar and butterfly health entered into a non binding letter of intent and this kind of gets us back to the bustamante case where is this is this an agreement to form and launch a company where the court said the court the court looked at his claim and said well this is like an agreement to form a launch a company and the company into it and don tars position said no this doesn't happen until we enter all the necessary agreements so the the real linchpin here seems to be what the individual status is versus the company so i'd appreciate your view on it because you're saying well she's not a party to the letter and she's a party to a side oral agreement is that a fair statement correct yet and so what i what i would focus on is the divergence between the communications between kelly and the  a corporation how big was it how many here and they reckon by how many people were you know shareholders how many employees in like that not that it wasn't large i don't know specifically in the record you know the on off shoes or what o i mean it's pretty clear she dealt with dawnstar as a representative of the corporation right she did it just pretty clear that she never said well at this point i'm speaking for myself that never came up t the communication from dom tars from the bar from dumped or from her at this moment i'm not thinking of anything there is nothing is there well so you know in this kind of situation to me first of all it's a classic it's almost like a you know conflict of interest to be pressing your own case when you when you're the sole representing the corporation yet that's what you claim she was doing in north she never told anybody about that well i don't want to arrest that in your brief at all do i'd like to back up a little bit actually there were actions were kelly was acting individually for example going to see and be securing their consent to the letter of intent and the back and know what she was going to be liable for personally is there was a divergence between dom tar dealing with butterfly help so when when don tar was dealing with butterfly health it was very clear saying this is non binding and that's fine ok but then when at the same time at the understand that but there aren't they what they're working toward i mean partnership has different meanings we can you know there's the legal partnership and then the let's have a partnership and move forward and companies talk about partnerships all the time even though they're not partners well in this particular case they there's nothing where so so then following up we're callow right there which so far we don't have  intent in which don tar and kelly memorialized in section two the terms of their joint venture we have the march thirtieth communication where the parties acknowledge their partnership step and support milestone we have the april nineteenth communications for m where he says there's no wavering one iota in our commitment to build a partnership right here ok down but then i wasn't it doesn't seem to me the situation has changed at this point well this gets into whatever it says you draw from the evidence this is as this is on the summary on the summary judgment standard drawing reasonable inferences in favor of kelly and here were that were saying this evidence shows that when they're when dom tar speaking with kelly personally that their to their calling her partner dumped her fully knew how do you can't talk to a company they have to talk to a person don't think well they could have talked to a butterfly house lawyers well you know that's speculation outside the record the fact is that she's representing butterfly health correct yes she's the c e o ok and i'm saying well they could have talked to the company's lawyers but but there's no evidence about that that talking to her so kelly had two roles here she was a she was going to participated in the stalking horse bid with donna tartt and she was the c e o and she went and got the boards approval to pursue that in her individual capacity in those are in the record those those resolutions and so the board knew and certainly dom tar knew that kelly was pursuing this individually and then so that takes us to the april nineteenth communique says that no wavering one iota to build a partnership and then we're excited to be your partner we're one hundred percent committed to the l o y i mean what does it mean to say you're one hundred percent committed to a non buying a lot a lot when you're talking to a party that's not a part of the other watch and i miss you just a tad many of these discussions were between your client and workers in the organization not the owner is what is the record shows to whether they had  authority to speak for the corporation these were extremely senior individuals mr fagan was a member of the management committee for is that ample fagan he's the president of their personal care division it's a two and a half billion dollar division yeah  know he's a big man he does big work but under the law of the state of california there has to be some documentation that that he through his office can commit the corporation and i am see anything in the record on that  sort of seems that there's a one man shop that had a lot of good people around making him look better but the actual owner those conversations aren't those the ones that you're referring to now that argue it was never me that i'm just having trouble if they can comes out he did say some things that if he were the owner you'd have pretty good case but i don't see where in this case there's a showing that he had the right to bind the corporation by his conversations with your client could you help me with that going to dramatize a corporation it can only speak to its officers and this is the most senior one of the most senior officers in the company along with mr macro souse involved his role as vice president strategy and this was an innovative product and that's what they wanted to buy this was perfectly within their wheel house in terms of what they were trying to do to build a personal care division so your your argument is if a person is in charge of innovation he because of that reason alone he can bind the corporation to anything he can speak for the corporation not necessarily innovation per se i'm talking more about the his sin or his seniority in the hierarchy of the company now this is a state case who go by the l california i didn't see this brief to my and maybe i missed it but i didn't see it briefed where the people who were speaking could find the corporation by their comments with your client that was not in the briefing good morning your honour's may please the court stacy carpenter on behalf of dom tire corp with me today is my colleague cohen as well i mean to pick off pick up sort of where you left off in the beginning and one of the issues in this case that is very difficult for the appellant is the fact that we do have a situation where there was a deal going on between two companies and miss ski of course was representing one of the companies at the same time that we've got th transaction between two companies that is well documented and with a lot of paper in the record she claims that there's this side agreement going on that's an oral agreement that is not well documented in the record and it creates just the conflict your honour's we're talking about where who is she acting on behalf of and how do we interpret this communication when we don't know if it's a reference to partnership the partnership between butterfly and dom tar or a reference between and the supposedly oral agreement it becomes even more difficult when we accept that her answer to that i think is simple and that is well there may be inferences to be drawn let this move away from summary judgment i think the problem with that position is that you have to start from the point that the only direct evidence in its uncontested points to the l a wide to establish the material terms so of course you have to start with the material terms and as it was pointed out those material terms are in a clearly non binding letter of intent and it is clear from the letter of intent both in its opening paragraph where it says this non binding agreement about a potential transaction as well as section seven which clearly does designates which provisions are binding which necessitates that the other ones are not binding so mr zazi likes to point to section two of the yellow watch there's no question but that section two of the l a law is non binding and while she likes to then back up and say i'm not a party to the l a y the problem is is that if those are the material terms of this supposedly oral joint venture then it's also immaterial term that it's non binding you can't say section two designates my material terms but i'm going to ignore the material fact that section two is non binding section two then that nine binding becomes one of the material terms if this is going to be our only direct evidence of this oral agreement the only other alternative explanation is that the non binding aspect of it  evidence uncontroverted evidence that dom tar had no intention to be bound and we have to remember that when we put the facts of this transaction into perspective it's uncontested the purpose of the suppose a joint venture was to obtain the assets of butterfly one when we have a situation where dom tar is not bound to obtaining the assets of butterfly one how can we sibly have a separate binding agreement force the formation of some joint venture the only purpose of which is to obtain the assets dom tar has no obligation to obtain maybe only after dancer in that  and might lead down the trail but i never found out whether they had authority to bind the corporation is there anything in the record that tells us that one way or the other in fact it's the opposite in the record if you look at the record at page one fifty two you will see that it's uncontested that the board of directors of dom tar had to approve this transaction so alternately  fagan and mr makris wall they're negotiating and making statements they are not the ultimate decision makers and they ultimately cannot bind the company this had to go to the board of directors which had not happened and which was an unresolved contingency of disagreement there was no was there evidence of that and the record yes the page one fifty two is actually an uncontested fact in this day i take it that the district the district court did not focus upon the district court did not focus on that instead the district court's opinion was focused on on two things one was the district court focused on the fact that if the material evidence is going to be the  why and it's non binding this must be a non binding even if there is a joint venture the second aspect at the district court focused on is that once you start from the position of the non binding yellow y which is are material terms then you've got your e mails what are the reasonable inferences that you can draw from those emails and what the district court found is that in light of the situation where the material terms even by position are from this non binding elo why it is not a reasonable inference to then say that the communication between the people negotiating and the references to a future agreement or a future partnership or future getting this across the finish line that it was not a reasonable inference to say that that then created a binding agreement ok let me go to one other point it's been a long time since i practiced law and your position in california but i have some memory decades ago and these contracts to issues like this there's very often need of good faith and fair dealing that comes up now in this case there was negotiated going back and forth they're going to get the assets that were in bankruptcy and end up with kelly was going to be a partner in this and continue her work but what happens is that your client sweeps in and grabs the whole asset and then she's outside of it was the would that would that be would there be a claim for good for failure to present obligation if there's terms within the agreement that need to be resolved later on or behavior or things that need to be done you need to act with good faith and fair dealing in this instance where there is no actual agreement and when we start from the there's a memorandum of understanding that is something that they were working on that was the basis of which they were going forward and and move the piece to ford so that your client could then move in and grab the assets isn't that sufficient to be in agreement that that there would be a claim for failure to observe good faith and fair dealing no your honor not when there's an express right to terminate because now we're talking about good faith and fair dealing between dom tar and butterfly is what you're really talking about did dom tar have an obligation to negotiate in good faith and try to conclude the transaction with butterfly was this raised at all in a district court relates to butterfly going outside of this deal without either notice or some other is that right and it doesn't bind marty anything you are correct it's a very common standard term in letters of intent that if we're actually even though they're non binding if we're going to go down this road and spend the resources and time to go down this road at the same time that you're courting us you can't go out there and use the information in court somebody else i mean that that's why these binding terms with him here are the typical terms which is if i'm going to spend money on this i'll get reimbursed we don't have a contract but we have access to records and all the standard things what's right and transactional acquisition so those are binding but the so called i'm sorry not binding that is correct which is also very standard when you have letters and content and obviously even the title letter of intent sort of designates where you're going it's an agreement to agree and you're correct because you're going to spend the resources on it and the time on it you're not allowed to court somebody else you get expenses and things like that this l o y is very specific also because it tells you which provisions specifically are binding which of course necessitates that the other provisions are not binding so when we look at the provision the only one that's of of issue here in this case of course is section two because that's the only section that m relies on for purposes of her material terms and it cannot be contested is not contested that section two is not within three to nine and therefore is not binding in this case although as i understand her argument if we take everything you said as which is what's laid out in the l o i we literally have to put that aside and then see what dealings there are between her and mar that might be leading to some kind of partnership or business relationship and she says if they're not it she's not asking us to decide that she's just saying give her a chance to make her argument why not the difficulty that mr zazi has is that you can't put the yellow eye aside because if you just look at the actions and the e mail communication and what we're doing to try to get across the finish line you don't have the material terms of the agreement this is the difficulty that she's trying to weave in this case she has to go back to the l a why because she needs to establish the material terms of the supposed oral joint venture the only thing if you look at the e mail there's no is in fact which what of course she is trying to do in this case the problem is there are two problems with that number one she says generally that section two incorporates the material terms section two if you look at it by it very nature explicitly as non binding so that gets incorporated the other problem that that doesn't get over is that even if she could do that even if you could parse out the l o i pull out those material terms ignore the fact that it's nonbinding you still have an issue in this case in that that gets you back to the bustamante case and even the pro elite case that appellant cite and in that those cases if you have an unresolved contingency that's material to the transaction or if you have future agreements that need to be resolved you cannot have a binding agreement we have that situation here because we have a situation where it's uncontested that the purpose of this alleged joint venture is to obtain the assets of butterfly one in order to obtain the assets of butterfly one and these are all uncontested facts there had to be an asset purchase agreement which was not done and it's uncontested that drafts were circulated but negotiations broke down you had to have approval you had to be the highest bidder at the bankruptcy proceeding you had to have approval by the bankruptcy court and then you also had to have this approval by the dom tarr board of directors so just like in bustamante where you couldn't possibly have this binding agreement for a future company until you have the funding secured you can't possibly have a binding agreement for a company that's based on the butterfly one assets until you've gone through these many steps that is sure you're going to get the butterfly want and this isn't the main step money money to do it and as i understand the record there was approval by the major lender of the agreement is that does that interfere with your line of reasoning it does not interfere with my line of reasoning because this was a special  section three sixty three bankruptcy transaction money is one issue conflict of interest is a nother issue and as has been pointed out there's the conflict of interest between miss brazil being involved in the suppose in the company and being involved as the c e o and butterfly one of those sort of conflicts of interests or major hurdles to get over in these types of transactions which is why approval by the bankruptcy court is a significant unresolved contingency that leads to the conclusion that there's no mutual consent for all the terms because nobody knows if you're going to get the butterfly one asses and until that is resolved you could not have a binding second agreement that is  soley on acquiring the butterfly one assets couldn't you have a binding agreement that subject to approval by the backseat court wouldn't that be a binding agreement between their actions so now you're writing in another term which of course is now it she she's not that's not her position you have to keep in mind i understand that yes so if you change the facts and so if i think hypothetically could we potentially have a binding agreement that is subject to well then you're acknowledging the contingency by its very nature it's not binding because it's not binding if you don't get the assets it is binding if you do so what you're doing is you're splitting the binding nature and saying if this then it is if not then it's not but they did get approval for the assets by going to the major bank and getting approval of the deal the bank had approval for them to go forward with the deal to resolve the debt no nothing had been filed with the bankruptcy court so we're far we're in this case you have to have the asset purchase agreement first we don't even have an asset purchase agreement then you've got to bid at the bankruptcy proceeding then you after even after you bid if you're the highest bidder you still need bankruptcy court approval so we have many steps down the road that had not even been started and could not have been nobody knows how they would turn out and they are just the sorts of contingencies that the bustamante court was talking about that prohibits you from then having a binding agreement i thank you a few points in response to counsel's arguments in terms of whether there's ambiguity over where the parties were referring to each other as partners both at the outset of this pursuit and the outset of the negotiations fagan told kelly i will not that we will not buy these assets without you and then later on april nineteenth they said we're excited to be your partner when they're saying we're excited to be your partner they're talking about kelly they're not talking about butterfly health second with respect to cruise which which holds that where a party express a willingness to enter a bargain but but but but indicates that further assent is required before there's a bargain that's exactly what these e mails are when they say yes we're your partner we're committed to this where we are we are unwavering commitment to this that is a manifestation of assent not withstanding that the letter of intent is non binding when we get to the board of director approval the board director approval relates to the three sixty three sale there is evidence in the record in kelly's declaration that nothing in regarding their joint venture agreement was contingent on board director approval then when we get to their epic application of bustamante bustamante wasn't talking about factual uncertainties if that was the case any any lawyer who wanted to start a firm would not have a binding partnership agreement because there's uncertainties about how successful your practice is going to what bustamante was talking about was if there's if there's uncertainty in the terms such the court c nothing that it would be unfair to enforce this agreement because of that open term and in fact if you go and look at the the markup of the operator agreement they provided the date they had they were essentially in agreement there so there ambiguity over what the exact terms of agreement are but little formality is required and a party cannot do what dom tar did here and say i won't buy these assets without you and then go and do that so  this is a case that should have gone to the jury these these e mail communications give rise to inferences that dom tar intended to be bound and that it manifests it's a cent to the deal and that's all we're asking is the opportunity to present the