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AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES. 

The Second Department, reversing Supreme Court, determined that the letter of intent constituted merely “an agreement to agree” which could not support breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel or fraud causes of action:

 

The letter of intent provided that parties “shall negotiate to arrive at mutually acceptable Definitive Agreements” regarding the potential joint venture and loan. The letter of intent further provided that the parties “each reserve the right to withdraw from further negotiations at any time if, in the sole judgment of either or both, it is in either Party’s best interest to do so, without further liability or obligation to the other.” * * *

The Supreme Court should have granted the defendants’ motion pursuant to CPLR 3211(a) to dismiss the complaint, as documentary evidence, in the form of the letter of intent, utterly refuted the plaintiff’s factual allegations, thereby conclusively establishing a defense as a matter of law … . ” [I]t is rightfully well settled in the common law of contracts in this State that a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable'” … . Here, the letter of intent demonstrated that the plaintiff’s allegations of breach of contract related to a mere agreement to agree … . Further, causes of action sounding in promissory estoppel and fraud require reasonable reliance on an alleged promise or misrepresentation … . Here, in light of the language of the letter of intent, any reliance on the defendants’ alleged promises and representations would, as a matter of law, have been unreasonable … . Finally, the language of the letter of intent utterly refuted the plaintiff’s allegations regarding an alleged breach of the covenant of good faith and fair dealing … . New York Military Academy v NewOpen Group, 2016 NY Slip Op 05706, 2nd Dept 8-3-16

 

CONTRACT LAW (AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES)/AGREEMENT TO AGREE (AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES)/LETTER OF INTENT (AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES)/COVENANT OF GOOD FAITH AND FAIR DEALING (AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES)/PROMISSORY ESTOPPEL (AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES)/FRAUD (AGREEMENT TO AGREE UNENFORCEABLE UNDER BREACH OF CONTRACT, BREACH OF COVENANT OF GOOD FAITH, PROMISSORY ESTOPPEL AND FRAUD THEORIES)

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