Law for Business 10th Edition by James Barnes,Terry Dworkin,Eric Richards

Exercise 3

Dunk, who owned a controlling interest in an explosives company, wanted to retire. He proposed to sell his shares to Shann, a British citizen who manufactured and sold explosives for mining. Early negotiations fell through due to financing problems. On November 24, 1992, Dunk proposed that he finance the sale; Shann's solicitor agreed, and an agreement was drawn up and faxed to Shann for his signature. The agreement, which Shann signed on November 25, was in rough preliminary form and contemplated memorialization in a more formal contract. Shann and Dunk hired attorneys to draw up the final stock purchase agreement. Soon thereafter a dispute arose about specifics in the final document, and each side proposed a writing different from the November 24 agreement. Shann eventually agreed to sign a document like the November 24 agreement, but Dunk refused. Dunk and Shann then sued each other. Was the November 24 agreement a contract or an agreement to negotiate further?