Arnold Palmer Golf Co. v. Fuqua Industries, Inc.
United States Court of Appeals for the Sixth Circuit
541 F.2d 584 (1976)
Arnold Palmer (plaintiff) and Fuqua (defendant) signed a detailed Memorandum of Intent describing a proposed combined company, including ownership percentages, funding arrangements, and mandatory-sounding language ("will," "shall") describing each party's planned actions, conditioned on preparing a mutually satisfactory definitive agreement and Fuqua board approval; Fuqua terminated negotiations before that definitive agreement was prepared, and the district court granted Fuqua summary judgment, finding the unmet conditions meant no binding contract existed.
Whether, to create an enforceable contract, both parties must have a clear understanding of the terms of an agreement and intent to be bound by its terms.