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Quake Construction, Inc. v. American Airlines, Inc.

Illinois Supreme Court
565 N.E.2d 990 (1990)

Quake Construction, Inc. v. American Airlines, Inc.


American Airlines, Inc. (American) (defendant) hired Jones Brothers Construction Corporation (Jones) (defendant) to handle construction contracts for the expansion of American’s facilities at O’Hare International Airport. Jones sent Quake Construction, Inc. (Quake) (plaintiff) an invitation to bid on the project. Quake submitted its bid. Jones orally informed Quake that it would be awarded the contract and sent Quake a letter of intent. This letter included language indicating that Quake had been awarded the contract, that American was authorizing the work, and that work would begin in approximately four to 11 days after the date of the letter. The letter also provided a cancellation clause, which provided that Jones could cancel the letter of intent if the parties could not agree on a fully executed agreement. Jones and Quake entered into negotiations for a written form contract. At a preconstruction meeting, Jones announced that Quake would be the general contractor for the project. However, that same day, American informed Quake that its involvement with the project was terminated. Quake filed suit. American and Jones filed a motion to dismiss. The trial court granted the motion to dismiss, finding that Jones lawfully terminated the contract under the cancellation clause. Quake appealed. The appellate court found the letter of intent ambiguous as to the parties’ intent to be bound by it and reversed the trial court's dismissal. American and Jones appealed to the Illinois Supreme Court.

Rule of Law


Holding and Reasoning (Calvo, J.)

Concurrence (Stamos, J.)

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