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

Exercise 4

Empro and Ball signed a letter of intent containing provisions for the sale of Ball's assets to Empro. Empro proposed to pay $2.4 million, with $650,000 due at closing and a 10-year promissory note for the remainder. The letter of intent stated that Empro's purchase shall be subject to the satisfaction of a certain six conditions precedent to the closing and effective "with the approval of the shareholders and board of directors of Empro." Empro ran into difficulties with the security for its promissory note. When Ball started negotiating with someone else, Empro sued, contending that the letter of intent bound Ball to sell only to Empro. Did the parties demonstrate an intent not to be bound?