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

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


Facts

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) an invitation to bid on the project. Quake submitted its bid. Jones orally informed Quake that it would be awarded the contract. Jones wanted Quake to provide license numbers of its subcontractors, but Quake informed Jones that it could not until it had entered into a formal arrangement. In order to induce the subcontractors to provide their license numbers, Jones provided Quake with a letter of intent. This letter included language indicated 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. American informed Quake that same day, however, 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 too ambiguous as to the parties’ intent to be bound by it. American and Jones appealed to the Illinois Supreme Court.

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Issue

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Holding and Reasoning (Calvo, J.)

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Concurrence (Stamos, J.)

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