The plaintiff sued defendants for breach of an alleged contract to jointly develop a new sports arena for use by the defendant Detroit
We conclude that the plaintiff's sworn complaint, affidavits and other documentary evidence raise a genuine issue of material fact as to whether the parties intended to agree and in fact agreed to a binding contract. Consequently, summary judgment should not have been granted.
This litigation arises out of the ill-fated plan to build a new sports arena, which was to have been called Olympia II, near the Pontiac Silverdome for primary occupancy by the Detroit Red Wings. The plaintiff alleges that the defendants breached a binding contract to jointly develop the arena on property owned by the plaintiff when they abandoned the project in favor of the City of Detroit's new riverfront arena, now known as the "Joe Louis Arena". The essential terms of the contract are allegedly embodied in a "Letter of Intent" dated March 11, 1977. The trial court granted defendants' motion for accelerated judgment, GCR 1963, 116, finding that the letter was, at most, an unenforceable agreement to agree and an insufficient memorandum to satisfy the applicable statutes of frauds. The trial judge also granted summary judgment under GCR 1963, 117.2(3), asserting
The plaintiff appealed the dismissal of the breach of contract claims to the Court of Appeals. That Court held that summary judgment under GCR 1963, 117.2(3) was appropriate. The statute of frauds issue was not addressed. We granted leave to appeal.
The trial court and Court of Appeals agreed with the defendants, as we have noted, that the letter of March 11, 1977, was "not intended to be a binding contract but operated only as an unenforceable agreement to agree". A contract to make a subsequent contract is not per se unenforceable; in fact, it may be just as valid as any other contract. 1 Corbin, Contracts, § 29, p 84; see Hansen v Catsman, 371 Mich. 79; 123 N.W.2d 265 (1963). Like any other contract, a contract to make a contract can fail for indefiniteness if the trier of fact finds that it does not include an essential term to be incorporated into the final contract. Socony-Vacuum Oil Co, Inc v Waldo, 289 Mich. 316, 323; 286 NW 630 (1939). Similarly, if the agreement is conditioned on the happening of a future event that, through no fault of the parties, never happens, liability does not attach. Professional Facilities Corp v Marks, 373 Mich. 673, 678; 131 N.W.2d 60 (1964): "The conditions upon which defendants' liability for a fee were to depend are not alleged to have been fulfilled at any time."
The fact that the parties in this case expressly left certain matters to be negotiated in the future is some evidence that the memorandum of March
"We must not jump too readily to the conclusion that a contract has not been made from the fact of apparent incompleteness. People do business in a very informal fashion, using abbreviated and elliptical language. A transaction is complete when the parties mean it to be complete. It is a mere matter of interpretation of their expressions to each other, a question of fact."
Whether the parties intend to be bound only by a formally written and executed final document is a question of fact, not a question of law; in most cases the question is properly left to the jury. Corbin, § 30, p 97.
A genuine issue of fact is created when the affidavits, pleadings, depositions, admissions and documentary evidence, viewed in the light most favorable to the party opposing the motion, might permit inferences contrary to the facts as asserted by the movant. Durant v Stahlin (Appeal in re
The letter of March 11, 1977, is not free from ambiguity. The interpretation urged by defendant-appellee and adopted by the lower courts would deny the letter any contractual effect. On the other hand, the letter may have been intended to protect the interests of each party should either party unilaterally abandon the project. As dissenting Court of Appeals Judge BEASLEY declared at p 775:
"These conflicting approaches to the parties' meaning are the stuff of which ambiguity is made. If there is ambiguity, this is not a case for accelerated or summary judgment."
Documentary evidence extrinsic to the March 11 letter gives rise to an inference that the parties intended a binding agreement. An earlier letter of intent dated September 16, 1976, stated explicitly that:
"Neither party shall be liable to the other for any fees, costs or expenses incurred by reason of the good-faith pursuit of the intent of this letter."
Although extended, the September 16 letter of intent apparently expired on December 15, 1976. The deletion of the above-quoted language from
Further support for plaintiff-appellant's position is found in the affidavit of plaintiff's attorney, James B. Dritsas, dated May 5, 1978, in which it is asserted that representatives of the parties were willing to be bound by a letter without an expiration date. The affidavit states in paragraph five that the relationship of the parties had changed since the drafting of the first letter of intent, when they were "unknown quantities to each other". It is reasonable to infer that since the parties "knew" each other and "were working for a common goal", they intended to contractually obligate each other to see the stadium project through to completion.
The trial court and the Court of Appeals majority carefully scrutinized the March 11 letter in order to ascertain the parties' intent. We eschew that approach, in part to emphasize that such a factual inquiry should have been made only by a trial court factfinder after consideration of all of the relevant evidence to be produced at trial on the point. Consequently, the Court of Appeals majority erred in finding no genuine issue as to any material fact, holding that the letter of March 11, 1977, was "not intended to be a binding contract but operated only as an unenforceable agreement to agree". 94 Mich.App. 774.
A similar factual dispute exists concerning the question whether the alleged contract of March 11, 1976, was ever accepted by the defendants. Generally, an offer may be accepted in any manner reasonable under the circumstances, unless the offeror specifies an exclusive mode of acceptance.
The trial judge correctly noted a genuine issue of material fact as to whether the defendants ever signed the letter; a similar dispute exists as to
The circuit court granted accelerated judgment for the defendants based on its finding that the March 11, 1977, letter was an insufficient note or memorandum to satisfy the requirements of the applicable statutes of frauds.
The Statute of Frauds has enjoyed a position of prominence in Anglo-American jurisprudence for three centuries
While the form of the statute has remained essentially unchanged over the centuries, judicial interpretation has undergone considerable evolution. The doctrine of "part performance" satisfying the statute is as old as the statute itself;
In contrast with American trial procedure, 17th Century English litigants and their relatives were disqualified from testifying. If a written contract did not exist, a jury was expected to discern and enforce oral contracts, even though the parties and those closest to them could not be heard or cross-examined.
The defendants cite Gedvick v Hill, 333 Mich. 689, 695; 53 N.W.2d 583 (1952), quoting Gault v Stormont, 51 Mich. 636, 638; 17 NW 214 (1883), as the most recent of a long line of Michigan cases requiring that "a memorandum, to be sufficient * * * must be complete in itself, and leave nothing to rest in parol." The specific holding in Gedvick, however, was that an agreement to sell property was, in fact, never reached; the written application for approval to sell property was not intended to be a contract. As noted in Randazzo v Kroenke, 373 Mich. 61, 70; 127 N.W.2d 880 (1964), the Gedvick Court then "gratuitously added", in dictum, that the application would not have satisfied the statute of frauds even if an agreement had been reached.
Similarly, this Court's decision in Tucson v Farrington, 396 Mich. 169; 240 N.W.2d 464 (1976), also cited to us by appellee, is inapposite. In Tucson, the trial court "judicially imposed terms from the parties' offers and counteroffers made during the course of negotiations subsequent to that writing. This was error." Id., 175. The Tucson case is readily distinguishable from the case at hand because here the plaintiff seeks to supplement, explain and clarify the meaning of the writing as actually intended by the parties at the time the agreement was reached.
We decline to accept the defendants' invitation to adopt narrow and rigid rules for compliance with the statute of frauds. Instead, we affirm the standard espoused by Professor Corbin and adopted by this Court in Goslin v Goslin, supra, 369 Mich. 376:
The defendants-appellees assert further that the letter of March 11, 1977, does not satisfy the statute of frauds because it fails to specify the exact construction site upon which the arena was to be erected, the time for completion of construction, and the time for the defendants to take possession. As to the time for completion and possession, it is well-settled that when no time for performance appears on the face of the agreement, absent any expression of a contrary intent, the law will presume a reasonable time. Goslin, supra, 375; Duke, supra; Goldberg, supra (opinion of BUTZEL, J., approved in Duke, supra); Mull v Smith, 132 Mich. 618; 94 NW 183 (1903).
As to the construction site, it appears from the face of the agreement that the parties agreed to a site of "not less than 50 acres" located on the premises owned by the plaintiff. The letter went on to provide:
"The parties will mutually select and agree upon the location of selected premises. The parties will also
It is evident that the parties did not regard the precise construction site within the plaintiff's 117-acre parcel as an essential term of their agreement. On this basis alone it need not have been included in writing, since only "essential" terms need be reduced to writing. Cf. Commercial Factors Corp v Zephyr Awning Corp, 353 Mich. 251; 91 N.W.2d 511 (1958). Further, the "best available site" within the plaintiff's tract is reasonably specific. There is evidence from the pleadings, affidavits and exhibits of record that the parties evidenced an intention to be bound to a reasonable, good-faith selection of the arena site. Finally, we note that the plaintiff has abandoned any demand for specific performance and seeks only damages. To the extent that the selection of one particular 50-acre site materially affects the computation of plaintiff's damages, the defendants are entitled to the assumption that the most advantageous site would have been selected.
In applying the statute of frauds with "intelligence and discrimination", it is clear that the March 11 letter has "substantial probative value in establishing the contract". Goslin, supra, 376. We therefore hold that the March 11, 1977, letter was sufficiently specific to satisfy all applicable statutes of frauds.
Finally, to the extent that plaintiff's complaint states a cause of action based on "promissory estoppel", accelerated judgment was inappropriate.
The judgment of the Court of Appeals is reversed and the cause is remanded to the circuit court for proceedings consistent with this opinion. Costs to plaintiff-appellant. We do not retain jurisdiction.
COLEMAN, C.J., and KAVANAGH, WILLIAMS, LEVIN, FITZGERALD, and BLAIR MOODY, JR., JJ., concurred with RYAN, J.
"If this letter properly reflects your understanding of the spirit and intent of what the parties are attempting to achieve, would you please so indicate by signing and returning one copy of this Letter of Intent.
"Dated: March, 1977"
The parties agree that the letter was not signed by Mr. Norris and returned to the plaintiff. The plaintiff claims, however, that there is evidence that it was signed by Mr. Norris but not returned.