Block v. Magura
949 N.E.2d 1261
Ind. Ct. App.2011Background
- Block and Magura formed a Letter of Intent to have Magura acquire Block's 35% interest in the CRH & B Partnership for $600,000.
- The LOI identified the asset, price, and that a formal agreement would incorporate the LOI terms; timing and closing were not finalized in the LOI.
- The Partnership Agreement required notice and a 45-day ROFR window, followed by up to 90 days to close, totaling an implied 135 days for completion.
- Block and Magura sought summary judgment on whether the LOI created an enforceable contract; the trial court granted Magura's motion.
- Block argues the LOI is a binding contract; Magura argues the LOI lacks essential terms and binding intent; on appeal, the court reverses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the LOI enforceable as a contract? | Block—LOI contains essential terms and expresses binding intent. | Magura—LOI lacks definitive terms and binding intent. | Enforceable contract; LOI contains essential terms and intent to be bound. |
| Are damages questions appropriate for remand after finding breach? | Block seeks damages for breach; contract price may be proper measure. | Magura disputes measurement; possible equitable considerations. | Damages factual issues remain; remand for damages determination. |
Key Cases Cited
- Conwell v. Gray Loon Outdoor Mktg. Grp., Inc., 906 N.E.2d 805 (Ind. 2009) (definite terms suffice for contract enforceability; not all terms must be explicit)
- Illiana Surgery & Med. Center, LLC v. STG Funding, Inc., 824 N.E.2d 388 (Ind. Ct. App. 2005) (enforceable contract where essential terms identified even if some details left out)
- Johnson v. Sprague, 614 N.E.2d 585 (Ind. Ct. App. 1993) (sale of real estate enforceable with essential terms; closing date and parties identified)
- Equimart Ltd., Inc. v. Epperly, 545 N.E.2d 595 (Ind. Ct. App. 1989) (letters of intent can show agreement to negotiate; not necessarily enforceable without finality)
- Empro Mfg. Co., Inc. v. Ball-Co Mfg., Inc., 870 F.2d 423 (7th Cir. 1989) (transaction 'subject to' future agreement often signals lack of binding contract)
- Real Estate Support Servs., Inc. v. Nauman, 644 N.E.2d 907 (Ind. Ct. App. 1994) (intent in contract law is objective; outward manifestation controls)
- MH Equity Managing Member, LLC v. Sands, 938 N.E.2d 750 (Ind. Ct. App. 2010) (enforceable settlement agreements formed by email exchanges when essential terms agreed)
- Sands v. Helen HCI, LLC, 945 N.E.2d 176 (Ind. Ct. App. 2011) (settlement terms evidenced by correspondence can be enforceable)