Continental Laboratories v. Scott Paper Co.

In 1987, Continental and Scott entered negotiations to supply and distribute hotel amenity products. Continental was to supply the products to Scott and Scott would then distribute the products around the United States. Beginning in May 1987, Scott representatives prepared at least five drafts of a written “Supply and Distribution Agreement” which was then presented to Continental for further negotiations. In July 1987, Scott announced internally that an agreement in principle had been reached with Continental. The parties’ continued to exchange phone calls and have meetings through July and August. Continental representatives believed that a binding oral contract was reached during a telephone conference on either August 25 or August 26, 1987 and that Scott’s representative’s would memorialize the contract in a written document. Scott representatives, however, never intended to be bound by an oral agreement. Scott representatives sent a copy of a written “Supply and Distribution Agreement” stamped “DRAFT” to Continental. The document also bore a stamp which said “REC’D SEP 02 1987.” While the document bore the signature of Scott’s Vice President, the “Commencement Date” was left blank and was never signed by Continental. The parties met again on September 9th and 10th to discuss the venture and, following those meetings, another revised copy of the Agreement was presented to Continental. On September 16, the parties met for a final time at which time a Scott representative informed Continental that Scott was no longer interested in the venture and terminated any further discussions.