168th and Dodge, LP v. Rave Reviews Cinemas, LLC

Court of Appeals for the Eighth Circuit

501 F.3d 945 (8th Cir. 2007)

An indefinite, preliminary agreement that merely outlines the terms of a potential future agreement is insufficient to form a binding contract.

Relevant Facts

Red Development of West Dodge, LLC and 168th and Dodge, LP (the plaintiffs) are commercial property developers. Rave Reviews Cinemas, LLC (the defendant) owns and operates a chain of movie theaters. The parties worked together on a theater development project known as the Jefferson Pointe Project. After the plaintiffs submitted a proposal for the project to the Omaha City Planning Department, the defendant approached the plaintiffs about a proposal to build a movie theater as part of the project. Pursuant to the defendant’s proposal, the plaintiffs sent a revised proposal which included the defendant’s theater, purchased additional land for the theater, and faxed a letter of intent to the defendants. The defendant’s president responded in a letter that he believed he was in agreement with “most of all of the major issues” set forth in the plaintiff’s letter of intent, but that he needed approval for the project from its board of directors. The parties later drafted a second letter of intent, outlining the proposed terms for a lease between the parties. The letter stated that it should “not be construed as either a lease agreement or an option to lease”. Rather, the letter described the terms that would be controlling in the event that a subsequent agreement were to be executed. The defendant signed the letter of intent and sent an accompanying letter restating his need to obtain approval for the project from its board of directors. Later on, the Omaha City Planning Board approved the project and the parties continued negotiations over the lease terms. Eventually, negotiations broke down and the defendant informed the plaintiff that it did not intend to build a theater any longer. As a result, the plaintiffs entered into another contract with a different movie theater company. The plaintiffs brought suit against the defendant in federal district court, alleging breach of express contract, breach of implied contract, and promissory estoppel. The district court granted the defendant’s motion to dismiss the breach of express contract claim and granted the defendant’s motion for summary judgment on the breach of implied contract and promissory estoppel claims. The plaintiffs appeal.

Issue

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Holding & Reasoning

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Concurrence

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Dissent

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Last updated:

December 12, 2020

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Procedural History

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Citations

501 F.3d 945 (8th Cir. 2007)