Continental Laboratories v. Scott Paper Co.
United States District Court for the Southern District of Iowa
759 F. Supp. 538 (S.D. Iowa 1990)
During negotiations for Scott (defendant) to purchase hotel-amenity products from Continental Laboratories (plaintiff), Scott sent multiple revised written contract drafts before and after an August 1987 phone conference that Continental believed created a binding oral agreement, and continued negotiating unresolved manufacturing and distribution terms and presenting further draft contracts even after that call; Scott ultimately withdrew from the deal entirely, and Continental sued for breach of the oral contract it believed was formed. Scott moved for summary judgment, arguing no binding contract existed.
Whether an oral agreement creates a binding contract if either party intends not to be bound in the absence of a fully executed written contract.