Same - Incomplete Negotiations

Similar to these cases are those in which the parties are carrying on negotiations, and have not yet come to an agreement. So long as the negotiations are incomplete, there is no contract.37 "An agreement to be finally settled must comprise all the terms which the parties intend to introduce into the agreement. An agreement to enter into an agreement upon terms to be afterwards settled between the parties is a contradiction in terms. It is absurd to say that a man enters into an agreement till the terms of that agreement are settled." 38

So, also, if the parties come to an agreement as to terms, but with the intention that their agreement is to be reduced to writing, and that they are not to be bound until this is done, there is no contract until the writing is drawn up and assented to by both as their agreement.89 If they come to a final agreement as to terms, it may, indeed, bind them, though they intend to reduce the terms into writing for the purpose of becoming bound in a more formal manner, or of preserving a memorial of the terms, or for any purpose other than that of making the writing exclusively their agreement.40 The question is whether they intend legal consequences before the formal written evidence of their agreement is executed. If they do not, there is no contract until this is done; but, if they do intend to be bound without regard to the writing, there is a contract.41 The question is one of fact; but the circumstance that they do intend a subsequent writing to be drawn up is said to be strong evidence that they do not intend to be bound by the preliminary agreement.42

36 CHEROKEE TANNING EXTRACT CO. v. WESTERN UNION TELEGRAPH CO., 143 N. C. 376, 55 S. E. 777, 118 Am. St. Rep. 806, Throckmorton Cas. Contracts, 31. In Moulton v. Kershaw, 59 Wis. 316, 18 N. W. 172, 48 Am. Rep. 516, the defendants wrote plaintiff: "We are authorized to offer Michigan fine salt, in full carload lots of 80 to 95 bbls., delivered at your city, at 85c. per bbl. * * * Shall be pleased to receive your order," - and the plaintiff at once replied, ordering 2,000 barrels, but the defendants refused to fill the order. The court held that defendants' letter was a simple notice that they were in a condition to supply salt for the price named, and an invitation to deal with them, and not an offer which plaintiff could change into a binding promise by his order. See, also, Beaupre" v. Telegraph Co., 21 Minn. 155; Kinghorne'v. Telegraph Co., U. C. 18 Q. B. 60; Lyman v. Robinson, 14 Allen (Mass.) 254; Smith v. Gowdy, 8 Allen (Mass.) 566; Schenectady Stove Co. v. Holbrook, 101 N. Y. 45, 4 N. E. 4; Harvey v. Facey, 1 Rep. 428; Id., [1893] App. Cas. 552; Patton v. Arney, 95 Iowa, 664, 64 N. W. 635. Cf. Keller v. Ybarru, 3 Cal. 147; College Mill Co. v. Fidler (Tenn. Ch.) 58 S. W. 382; Zeltner v. Irwin, 25 App. Div. 228, 49 N. Y. Supp. 337 [reversing 21 Misc. Rep. 13, 46 N. Y. Supp. 852]. See "Auctions and Auctioneers;' Dec. Dig. (Key-No.) §§ 7, 8; Cent. Dig. §§ 20-40.

37 Lyman v. Robinson, 14 Allen (Mass.) 242; Schenectady Stove Co. v. Holbrook, 101 N. Y. 45, 4 N. E. 4; Bean v. Clark (C. C.) 30 Fed. 225; Templeton v. Wile (City Ct.) 3 N. Y. Supp. 9; Commercial Tel. Co. v. Smith, 47 Hun (N. Y.) 494; Morris v. Brightman, 143 Mass. 149, 9 N. E. 512; Wardell v. Williams, 62 Mich. 50, 28 N. W. 796, 4 Am. St. Rep. 814; Shaw v. Glass Works, 52 N. J. Law, 7, 18 Atl. 696; Whiteford v. Hitchcock, 74 Mich. 208, 41 N. W. 898; Gates v. Nelles, 62 Mich. 444, 29 N. W. 73; Canning v. Far-quhar, 16 Q. B. Div. 727, 55 L. J. Q. B. 225; Strong & Trowbridge Co. v. H. Baars & Co., 60 Fla. 253, 54 South. 92. And see ante, p. 35. See "Contracts," Dec. Dig. (Key-No.) § 16; Cent. Dig. §§ 49-56.

38 Ridgway v. Wharton, 6 H. L. Cas. 26S. And see Shepard v. Carpenter, 54 Minn. 153, 55 N. W. 906; Sibley v. Felton, 156 Mass. 273, 31 N. E. 10; Strobridge Lithographing Co. v. Randall, 73 Fed. 619, 19 C. C A- 611; St.