Budget Marketing, Inc. v. Centronics Corporation
United States Court of Appeals for the Eighth Circuit
927 F.2d 421 (1991)
- Written by Joseph Bowman, JD
Facts
Budget Marketing, Inc. (BMI) (plaintiff) and Centronics Corporation (Centronics) (defendant) executed a letter of intent outlining the terms of a proposed acquisition. Centronics was to acquire BMI provided BMI satisfied certain conditions, including maintaining sufficient cash flow and purchasing key-man insurance. The letter of intent included a target date for the execution of a formal agreement. The letter also stated that, except for confidentiality provisions, the letter itself was not a binding agreement. Later, the parties amended the letter to change the projected formal-agreement date. In the interim, BMI took steps to comply with the letter’s requirements. BMI expanded its operations and obtained key-man insurance, and Charles Eagle (plaintiff), BMI’s CEO, personally secured a loan for BMI. Eagle kept Centronics appraised of BMI’s progress, and Centronics repeatedly confirmed its intent to consummate the acquisition. However, Centronics later decided not to acquire BMI. BMI and Eagle sued Centronics for, among other things, breach of an implied duty to negotiate in good faith and promissory estoppel. Centronics moved for summary judgment, and the district court granted the motion. BMI and Eagle appealed.
Rule of Law
Issue
Holding and Reasoning (Gibson, J.)
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