Arnold Palmer Golf Co. v. Fuqua Industries, Inc.

Plaintiff, Arnold Palmer Golf Co., began a business relationship with Defendant, Fuqua Industries, Inc., to obtain a third party manufacturing company. Jointly, Plaintiff and Defendant contacted Fernquest and Johnson, who manufactured golf clubs. Thereafter, Plaintiff and Defendant signed a Memorandum of Intent that indicated that the proposed new corporation the parties agreed to form. Further, the memorandum stated Plaintiff would be the owner of seventy-five percent of the new company, while Defendant would be the owner of the remaining twenty-five percent. The memorandum also stated how the new company would be managed, that Plaintiff and Defendant’s attorney’s would promptly prepare a contract for the proposed business between the parties. Likewise, the memorandum had two conditions that needed to be fulfilled for the agreement to be enforceable. First, the parties must prepare a definitive agreement for the proposed agreement to combine the two businesses into a new corporation. Second, Defendant’s Board of Directors was required to approve the agreement. Nonetheless, before the agreement was created, Defendant stopped negotiating with Plaintiff. Plaintiff brought suit to enforce the contract against Defendant. The district court held that because the conditions were not fulfilled, there was not a valid contract to enforce against Defendant. Therefore, the district court granted Defendant’s motion for summary judgment, and Plaintiff appealed.