Butler v. Balolia

Inventor David Butler (plaintiff) and prospective buyer Shiraz Balolia (defendant) signed a letter of intent setting a target closing date, purchase price, and mutual obligations of confidentiality, exclusivity, and best efforts to negotiate a final purchase agreement; the letter also barred Butler from negotiating with other buyers before the deadline, and Butler complied by declining other inquiries. The deal fell through when Balolia allegedly fabricated technology deficiencies to justify rescinding and renegotiating the letter, and no purchase agreement was ever signed; Butler sued in state court seeking a declaration that the letter itself was an enforceable contract, and after removal to federal court on diversity grounds, the district court granted Balolia's motion to dismiss, finding the letter unenforceable.