Goobich v. Waters

After the collapse of an apparent agreement between Joel Goobich and Gary and Teresa Waters concerning the purchase of Outdoor Environments, Inc. OEI, a nursery business, Goobich sued the Waterses for breach of contract and specific performance. The trial court granted the Waterses’ summary judgment motion, and Goobich now appeals. Because we find that the parties had reached an enforceable agreement on all material terms, we reverse. Viewed in the light most favorable to Goobich, the record shows that the Waterses decided to sell OEI in 2004. After negotiations, the parties finalized a letter of intent on November 29.

The letter specified that Goobich would purchase and the Waterses would sell the OEI properties and business for terms including $1,950,000 in cash at closing, a five-year contract for consulting by the Waterses in exchange for $225,000, a six-year earn-out of $600,000 to the Waterses, and an incentive bonus of $150,000. The letter also provided, however, that it shall not create any legally binding rights or obligations . . . except as provided in Paragraphs 6, 7, 8, and 10 below. Instead, Buyer and Seller . . . have merely expressed their intention of negotiating one or more agreements . . . containing principal terms, as may be mutually agreed therein. Upon your execution of this letter, each of the undersigned will use their mutual reasonable efforts to negotiate a binding Purchase Agreement with a view to consummating any agreed transaction on or before January 14, 2005. Paragraph 6 of the letter reads in relevant part as follows: