Opinion ID: 780630
Heading Depth: 2
Heading Rank: 1

Heading: Intent to Enter Contract

Text: 20 CDC first contends that the district court erroneously concluded that no enforceable contract existed between itself and JMJ. It asserts that the exchange of letters in April and May 1997 2 manifested the parties' intent to form a binding agreement and that the court improperly determined that the parties' subsequent negotiations in September 1997 to enter a more formal agreement negated that agreement as a matter of law. Whether CDC and JMJ intended to enter into a contract is a factual issue which we review for clear error. Ginsu Prods., Inc. v. Dart Indus., Inc., 786 F.2d 260, 262 (7th Cir.1986); see also City of El Centro v. United States, 922 F.2d 816, 820 (Fed.Cir.1990); Bay Area Typographical Union, Union No. 21 v. Alameda Newspapers, Inc., 900 F.2d 197, 199 (9th Cir.1990). To determine whether the parties intended to be bound by the alleged contract, we look not to the parties' subjective intent but rather to objective evidence of their intent. Empro Mfg. Co. v. Ball-Co Mfg., Inc., 870 F.2d 423, 425 (7th Cir.1989). When parties make a pact subject to the execution of a later agreement, they manifest an intent not to be bound by the original pact. Id.; see also Chicago Inv. Corp. v. Dolins, 107 Ill.2d 120, 89 Ill.Dec. 869, 481 N.E.2d 712, 715 (1985). 21 The evidence presented at trial supports the district court's factual determination that CDC and JMJ did not intend to be bound by the Spring 1997 exchange of letters. First, it is not clear that Morse intended his April 8 letter to constitute an offer to Cohen to enter a contract. In the letter Morse suggested that Cohen allow me to go make the business deal on the land and [CDC] will have what was originally agreed to, as will [JMJ]. CDC's assertion that this statement constituted a specific offer reads more into Morse's words than is reasonable. Morse prefaced the offer with language more indicative of a willingness to bargain than an invitation to contract, stating that I believe our best course of action would be to determine how to secure a longer term option without either of us losing our previously agreed upon development interests. Furthermore, his offer was vague, failing to set forth any specific obligations the parties would undertake, and was qualified by language more consistent with an invitation to bargain than an offer to enter a contract. Rather than asking Cohen to indicate whether he accepted the terms of the offer, Morse's letter stated, Les, the ball is in your court and [p]lease give me a call at your earliest convenience, indicating that further discussion was necessary. Cohen thus failed to establish that Morse's April 8 letter constituted an offer to contract. 22 Additionally, the exchange of documents reflects that both JMJ and CDC intended to enter a formal agreement setting forth their relationship and respective obligations with respect to purchasing the Roden property. Before Morse made his April 8 offer to Cohen, Cohen in an April 3 letter had expressed impatience waiting for the parties to enter a formalized agreement and had invited Morse to provide a red-line or summary of what we can later incorporate into a more formal written agreement. Furthermore, although Cohen in his May 6 letter purported to accept Morse's offer, the parties continued to negotiate the terms of a formal agreement until CDC's Option expired, further indicating that they had not reached an agreement in, or intended to be bound by, the Spring 1997 letters. In light of this evidence, we cannot say that the district court clearly erred in finding that JMJ and CDC did not intend for the exchange of letters to form a binding written contract. 23 Because we agree with the district court's finding that CDC and JMJ did not intend to enter a binding agreement via their exchange of letters, we need not consider CDC's argument that subsequent negotiations did not render that agreement void.