Bridge Enterprises, Inc. v. Futurity Thread Co.
1974 Mass. App. LEXIS 630, 2 Mass. App. Ct. 243, 310 N.E.2d 622 (1974)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A written memorandum that contains all the material terms of an agreement, such as a lease, constitutes a binding and enforceable contract, even if the parties contemplate the future execution of a more formal document.
Facts:
- The Plaintiff, a tenant in the Defendant's building, negotiated with the Defendant's sales manager, Benjamin G. Rae, III, to lease a portion of the building's first floor.
- On February 1, 1972, the Plaintiff's treasurer, George D. Coupounas, and Rae signed a memorandum for a five-year lease of approximately 10,653 sq. ft. of the first floor, with an option to renew for five more years.
- The memorandum provided that the Defendant would prepare a formal lease document subject to the approval of the Plaintiff's attorney.
- In February 1972, the Plaintiff took possession of the specified first-floor space.
- The Defendant drafted a formal lease but omitted the five-year renewal option that was included in the memorandum.
- The Plaintiff rejected the draft lease due to the discrepancy, and the Defendant refused to prepare a corrected version.
- On April 5, 1972, the Defendant sent the Plaintiff a letter attempting to revoke the offer to lease.
Procedural Posture:
- The Defendant brought an action of ejectment against the Plaintiff in a District Court.
- The Plaintiff filed a bill in equity for specific performance against the Defendant in a trial court of general jurisdiction.
- The case was referred to a master, who found that the Plaintiff was in lawful possession and that the Defendant was not entitled to possession.
- The Defendant filed exceptions to the master's report.
- The trial court entered an interlocutory decree overruling the Defendant's exceptions and confirming the master's report.
- The trial court entered a final decree ordering the Defendant to execute and deliver the lease as per the agreement.
- The Defendant (appellant) appealed the interlocutory and final decrees to this court (the Appeals Court).
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a written memorandum that specifies the parties, premises, duration, and rent for a lease constitute an enforceable contract, even if it contemplates a future formal lease, uses approximate measurements, and omits minor terms?
Opinions:
Majority - Rose, J.
Yes, a written memorandum specifying all material terms constitutes an enforceable contract. The court held that the memorandum was a binding agreement because it contained all essential terms, and the contemplated formal lease was merely a 'mere memorial' of an already finalized contract. The property description was sufficient under the Statute of Frauds because extrinsic evidence, such as the parties having inspected the specific, walled-off space, could be used to identify the premises with reasonable certainty. The court also found that the defendant's sales manager had authority to bind the defendant, and the omission of non-material terms (e.g., water charges, repairs) did not render the agreement invalid.
Analysis:
This decision reaffirms the principle that a preliminary agreement containing all essential terms can be a binding contract, not just an 'agreement to agree.' It demonstrates that courts will enforce such agreements if the parties' intent to be bound is clear from the document and surrounding circumstances. The case is significant for its application of the Statute of Frauds, clarifying that a description of property does not need to be perfectly precise in the writing itself if extrinsic evidence can resolve any ambiguity. This impacts contract drafting and negotiations, warning parties that memoranda of understanding or letters of intent may be deemed fully enforceable contracts.
