Amer. Aero. Corp. v. Grand Cen. Aircraft Co

In Amer. Aero. Corp. v. Grand Cen. Aircraft Co. (1957) 155 Cal. App. 2d 69, American Aeronautics admitted that it had entered an oral agreement with Grand Central Aircraft to reconstruct and assemble two aircraft, but refused to execute the written agreement to which the oral agreement had been reduced on the ground that it failed to conform to the oral agreement. Among the issues on appeal was the propriety of an award of attorney fees to Grand Central Aircraft on the ground that the "complete terms of the oral agreement were to be found in the proposed written contract," which included an attorney fees provision. (155 Cal. App. 2d at p. 78.) The Court of Appeal found that the evidence did not "support the finding that each of the parties accepted and approved the proposed written contract as containing the oral agreement." ( Id. at p. 79.) It concluded that the attorney fees provision in the proposed written contract could not be given effect because the written agreement had never taken effect: ". . . insofar as the proposed written contract is concerned two of the necessary elements of a valid contract are lacking. There was no mutual assent and there was no delivery. It was part of the understanding of the parties that their oral agreement should be reduced to writing, signed by them, and delivered. The oral agreement, as made, was not reduced to writing. New terms were added in the writing, and it was never signed by American or delivered. The result was that the oral agreement remained binding citations, and the proposed written contract was of no force or effect." ( Id. at pp. 82-83.)