Letter Agreement Intended to Be Binding
In Murphy v. Seabarge, Ltd., the letter agreement between the parties, a partnership agreement that provided for the payment of a management fee, provided it was "not intended to be a binding contract." 868 S.W.2d 929, 933 (Tex. App.--Houston [14th Dist.] 1994, writ denied).
Nevertheless, the court found that a fact question on the parties' intent was properly presented to the jury. Id.
While the language used in Murphy, i.e., "not intended to be a binding contract," is quite similar to the language used in paragraph 15 of the letter agreement in this case, we nonetheless believe that Murphy is distinguishable.
In Murphy, the court found the plaintiff's actions after the agreement was signed were sufficient to raise a fact question. Id.
Specifically, the partnership agreement provided that the plaintiff would be paid a minimum management fee. Despite the fact that the partnership agreement was never formalized, the court found that by beginning to pay himself the management fee provided for in the agreement, the plaintiff created a fact issue on his intent to be bound. Id.
In Coastal Corp. v. Atlantic Richfield Co., 852 S.W.2d 714, 717 (Tex. App.--Corpus Christi 1993, no writ), a letter agreement for the sale of securities provided, "nothing in this Agreement shall be binding upon any of the parties until this Agreement is executed by all of the parties by their duly authorized officers."
Because the agreement was never executed, no "written agreement" sufficient to comply with the statute of frauds ever existed. Coastal Corp., 852 S.W.2d at 717-18.
The court stated that "it is clear that the owners did not consider themselves to have a contract. the document memorializing the agreement expressly required that it be executed." Id. at 717.
Accordingly, the trial court's grant of summary judgment was affirmed. Id. at 721.