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  • Channel Home Centers v. GrossmanChannel Home Centers v. Grossman
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Channel Home Centers v. Grossman

United States Court of Appeals for the Third Circuit
795 F.2d 291 (3d Cir. 1986)



Channel Home Centers (Channel) (plaintiff) owned and operated retail home improvement stores. Grossman (defendant) and his company Tri-Star were real estate brokers and developers who were buying Cedarbrook Mall. Grossman contacted Channel to offer it a lease in Cedarbrook Mall. Channel was interested, but in order to help Grossman secure financing to purchase the mall, Grossman requested Channel to prepare a letter of intent. Channel accordingly submitted a letter of intent specifying terms of the lease and requesting Grossman withdraw the property from the market for the purposes of concluding the lease with Channel. Grossman signed the letter of intent, and Channel had its attorneys prepare a lease for the premises. Channel also developed marketing plans, building plans, and delivery schedules and purchased materials and equipment. Channel submitted a proposed lease to Grossman, but Grossman began showing the property to another prospective tenant and later sent Channel a letter terminating the negotiations on the basis of Channel’s alleged failure to submit a satisfactory lease within a thirty-day time period. Channel sued when Grossman leased the property to the other prospective tenant. The district court held that the letter of intent was not a valid agreement and so was not binding on Grossman, and Channel appealed.

Rule of Law


Holding and Reasoning (Becker, J.)

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