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Reprosystem, B.V. v. SCM Corp.
United States Court of Appeals for the Second Circuit
727 F.2d 257 (1984)
Reprosystem, B.V. (Reprosystem) and N. Norman Muller (plaintiffs) entered into negotiations to purchase a portion of SCM Corporation (defendant). The parties negotiated for months before getting close to a final deal. During negotiations, the parties communicated that the deal would be finalized in a formal agreement. Drafts of the agreement also included provisions that required the agreement to be formally executed before it was binding. After months of negotiations, the parties finally determined that they had resolved all disputes and congratulated each other on their joint success. Just before the final deal was set to be slated, one of SCM’s employees discovered a major accounting error in the deal and determined that the terms were not as beneficial as previously thought. SCM then halted all negotiations with Reprosystem and Muller, effectively pulling out of the deal. Reprosystem and Muller filed suit against SCM, claiming that SCM breached a contract of sale. The trial awarded in favor of Reprosystem and Muller. SCM appealed.
Rule of Law
Holding and Reasoning (Pratt, J.)
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