Empro Manufacturing Co., Inc. v. Ball-Co Manufacturing, Inc.

EASTERBROOK, Circuit Judge.

We have a pattern common in commercial life. Two firms reach concord on the general terms of their transaction. They sign a document, captioned “agreement in principle” or “letter of intent”, memorializing these terms but anticipating further negotiations and decisions — an appraisal of the assets, the clearing of a title, the list is endless. One of these terms proves divisive, and the deal collapses. The party that perceives itself the loser then claims that the preliminary document has legal force independent of the definitive contract. Ours is such a dispute.

Ball…