Barry S Ring v. Bharatkumar Patel

Indianapolis, IN - Contract lawyer represented Appellant with appealing the grant of partial summary judgment.

On October 15, 2017, Ring was interested in purchasing certain commercial

real estate in the city of Hobart from Patel. That same day, Ring sent a letter of

interest1 (original letter) to Patel that included the following language:

This letter is being executed solely for the convenience and future

reference of the parties and their counsel, and it is not intended and

shall not be construed as a binding contract between the parties; rather,

it shall form the basis for negotiation of the Purchase Agreement, which

1 The parties use "intent” and "interest” interchangeably when referring to the letter. For purposes of

consistency, we will use "intent” throughout the opinion.

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shall constitute the sole contract between Seller and Buyer if and when

executed and delivered.

. . .

7. Terms of Offer: The foregoing may be accepted by Seller by

executing and returning a counterpart of this letter of interest to

Buyer and upon the settlement of the purchase price pursuant to

the firm offer.

Upon acceptance, Buyer would cause a Purchase Agreement, as specified

herein, to be prepared and delivered to Seller within ten (10) business

days after the date of execution and delivery hereof, which Purchase

Agreement would incorporate the terms of this letter of interest

and any other terms and conditions which Buyer may propose.

This letter of interest is not intended to be and shall not constitute a

contract or binding agreement and shall not create any legal rights or

obligations between the parties. Further, neither party shall have the

right to rely on this letter of interest for any reason whatsoever. It is

intended that all legal rights and obligations between Buyer and Seller

(if any) would be created under and governed solely by the Purchase

Agreement if and when the same is fully executed by Buyer and Seller.

Appellant's Appendix Vol. II at 49-50 (emphasis added).

[4] After some negotiations, Patel submitted a "revised letter of intent” (revised

letter) to Ring on January 12, 2018, stating in part that he was "only addressing

the items [where] there may be a difference of terms.” Id. at 64. The revised

letter provided for the payment of earnest money from Ring in the amount of

$25,000 "upon execution of a purchase and sale agreement.” Id. at 63. Patel

further stated in the revised letter that the final terms were to be "formalized in

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[a] sales contract and approved by attorneys for Purchaser and Seller.” Id.

Patel and Ring both signed the revised letter on January 19, 2018.

[5] Negotiations continued and "different purchase agreements [were] sent back

and forth between the parties.” Id. at 57. Ring did not send the first proposed

purchase agreement to Patel until May 10, 2018. Patel discovered that the

terms set forth in that proposed purchase agreement differed in many respects

from those contained in the revised letter executed on January 19, 2018.

Consequently, on June 4, 2018, Patel's counsel sent a letter to Ring's attorney

stating in part that the proposed purchase agreement "was not acceptable.” Id.

at 68. Patel's counsel pointed out that several issues remained unresolved

including the material terms of a license agreement for an electric sign that

would be placed on the property, along with a provision for an easement.

Thus, Patel did not sign Ring's proposed purchase agreement, and Ring did not

tender any earnest money.

[6] On August 21, 2018, Ring filed a complaint for specific performance, alleging

that Patel refused to convey the property and failed to execute a purchase

agreement according to the material terms of the agreement. In the complaint,

Ring alleged that Patel had agreed to a sale price of $75,000 and to grant him

the right to place an advertising sign on the premises. Ring further contended

that the revised letter dated January 19, 2018, that he and Patel executed,

constituted a binding and enforceable contract. Thus, Ring asserted that Patel's

failure to perform in accordance with the executed letter of intent amounted to

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a breach of contract, and that specific performance is the appropriate remedy

because of the property's unique characteristics.

[7] Patel denied the material allegations of the complaint and filed a counterclaim

against Ring, claiming that Ring's complaint was "unreasonable, groundless,

and frivolous,” and that he was entitled to reasonable attorneys' fees incurred in

defending against the action. Id. at 42.

[8] On September 30, 2019, Patel filed a motion for partial summary judgment,

claiming that he was entitled to judgment as a matter of law because Ring's

complaint was based entirely on an "unenforceable agreement to make an

agreement,” as there was no meeting of the minds as to the material elements of

the proposed agreement. Id. at 48, 54.

[9] Following Ring's opposition to the motion, the trial court heard argument on

August 18, 2020. The next day, the trial court granted Patel's motion for partial

summary judgment. In its order, the trial court determined that Patel's revised

letter differed significantly from the terms of the original letter and concluded

that the original letter and revised letter "were not a contract,” that the "words

of the documents clearly demonstrated each party's intent to reach an

agreement to agree,” and "at best the two documents constituted an agreement

to agree.” Id. at 24.

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[10] Ring now appeals. 2

Discussion and Decision

[11] We review summary judgment motions de novo, applying the same standard

as the trial court. Hartman v. BigInch Fabricators & Constr. Holding Co., Inc., 161

N.E.3d 1218, 1220 (Ind. 2021). That is, we draw all reasonable inferences in

favor of the non-moving party and summary judgment is appropriate where

there is no genuine issue as to any material fact and the moving party is entitled

to judgment as a matter of law. Griffin v. Menard, Inc., 175 N.E.3d 811, 813

(Ind. 2021).

[12] Ring argues that the summary judgment order must be set aside because the

trial court erred in finding as a matter of law that a contract did not exist

between him and Patel. Ring asserts that because he and Patel signed the

revised letter on January 19, 2018, Patel breached the alleged contract by

refusing to proceed with the sale.

[13] We initially observe that a mere "agreement to agree” at some future time is not

an enforceable contract. Wolvos v. Meyer, 668 N.E.2d 671, 674 (Ind. 1996).

That is, "the so-called 'contract to make a contract' is not a contract at all.” Id.

at 675. Parties may, however, enter into an enforceable contract that requires

2 The trial court initially determined that Patel's counterclaim was to remain pending. However, Patel filed a

motion to dismiss the counterclaim on May 20, 2021, which the trial court granted on June 3, 2021. Ring

then filed his notice of appeal on July 6, 2021.

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them to execute a subsequent final written agreement. Id. at 674. But when one

enters into an agreement with the understanding that neither party is bound

until a subsequent formal written document is executed, no enforceable contract

exists until the subsequent document is executed. Id. at 675.

[14] The difference between an enforceable contract and an unenforceable

"agreement to make an agreement” is whether there is an agreement on all

essential terms such that the final document is understood to be a mere

memorial of the agreement. See id. at 674-75. If the document or contract that

the parties agree to make is to contain any material term that is not already

agreed upon, no contract has yet been made. Id. at 675. Although letters of

intent can be enforceable contracts, it is a question depending on the facts of

each case whether sufficient terms and language are included. Block v. Magura,

949 N.E.2d 1261, 1268 (Ind. Ct. App. 2011).

[15] To illustrate, in Equimart Ltd., Inc. v. Epperly, 545 N.E.2d 595 (Ind. Ct. App.

1989), a letter of intent stated the parties would "attempt, in good faith, to

negotiate a definitive purchase agreement” for the sale of certain stock. Id. at

598. That letter further provided that "consummation of the transaction here

contemplated . . . will be subject to the execution of delivery of a Final Agreement in a

form reasonably satisfactory to the parties and their respective counsel.” Id. (emphasis

added). We determined that the above language indicated that the parties

merely "agreed to agree” after a period of negotiation, and that the letter of

intent was not a binding purchase contract. Id.

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[16] Like the circumstances in Equimart, various terms set forth in Ring's original

letter of intent—that were also incorporated in the revised letter that Ring and

Patel executed on January 19, 2018—include similar statements regarding

intent and enforceability:

On behalf of Dr. Barry Ring . . . (Buyer), this letter of interest

sets forth certain business terms (but not all of the material terms and

conditions) upon which Buyer is prepared to purchase the abovereferenced Property from you, as the title holder of the Property

("Seller”), subject to negotiation and execution of a formal Purchase and

Sale Agreement which would incorporate the business terms set

forth herein among other terms and conditions ("Purchase

Agreement”). This letter is being executed solely for the convenience

and future reference of the parties and their counsel, and it is not

intended and shall not be construed as a binding contract between the

parties; rather, it shall form the basis for negotiation of the

Purchase Agreement, which shall constitute the sole contract between

Seller and Buyer if and when executed and delivered.

Upon acceptance, Buyer would cause a Purchase Agreement, as

specified herein, to be prepared and delivered to Seller within ten

(10) business days after the date of execution and delivery hereof,

which Purchase Agreement would incorporate the terms of this

letter of interest and any other terms and conditions which Buyer

may propose.

This letter of interest is not intended to be and shall not constitute a

contract or binding agreement and shall not create any legal rights or

obligations between the parties.

It is intended that all legal rights and obligations between Buyer and

Seller (if any) would be created under and governed solely by the

Purchase Agreement if and when the same is fully executed by Buyer and

Seller.

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Appellant's Appendix Vol. II at 59, 61 (emphasis added). In turn, the revised letter

stated that "[f]inal terms to be formalized in sales contract and approved by

attorneys for Purchaser and Seller.” Id. at 64.

[17] It is readily apparent that once the revised letter of intent was executed, it was

intended that Ring would submit a purchase agreement that would incorporate

the agreed-upon terms. And the executed revised letter makes it clear that the

parties' rights and obligations would be governed "solely by the Purchase

Agreement” after the parties were in final agreement in a form that was

approved by their respective attorneys. Indeed, the parties specifically agreed

that the executed revised letter was not "intended to be and shall not constitute a

contract or binding agreement and shall not create any legal rights or obligations between

the parties.” Appellant's Appendix Vol. II at 61 (emphasis added). Rather, the

parties contemplated further negotiation and a future agreement if they could

agree on all the material terms. And the designated evidence supports the

conclusion that the parties never arrived at a final agreement as to what the

various and material terms of a purchase agreement should be or were.

[18] Contrary to Ring's contention, this is not an instance where the parties have

agreed to the essential terms of the contract and the subsequent execution of a

formal purchase agreement would merely memorialize the existence of that

contract. Moreover, even had all material terms been agreed upon, Ring did

not submit a proposed purchase agreement to Patel within ten days after the

revised letter had been executed.

In reviewing the documents exchanged by Patel and Ring, it is apparent that

the revised letter executed by both on January 19, 2018, called for further

negotiation. At most, there was an agreement to agree to buy and sell the real

property; as such, under Indiana law, there was no enforceable contract.

Therefore, we conclude that the trial court properly granted partial summary

judgment for Patel.





Judgment affirmed.