A/S Apothekernes Laboratorium For SpecialPraeparater v. I.M.C. Chemical Group, Inc.
United States Court of Appeals for the Seventh Circuit
873 F.2d 155 (1989)
Lab (plaintiff) and IMC (defendant) negotiated a sale of IMC's business division under a letter of intent expressly conditioning any final agreement on both companies' board approval; even after the negotiators reached a full meeting of the minds on terms (past the letter's own 60-day deadline), IMC's parent-company president rejected the deal, binding IMC's board to reject it too, and Lab sued for breach of contract and breach of the duty to negotiate in good faith.
Whether the intent of the parties determines whether an enforceable contract is created during the course of negotiations, or whether some type of formalization of the agreement is required before it becomes binding.