Non Binding Letter of Agreement to Buy Securities Case Example
In Coastal Corp. v. Atlantic Richfield Co., the parties entered into a nonbinding letter agreement for the sale of securities. 852 S.W.2d at 717.
On appeal, the prospective buyer argued that the prospective seller had fraudulently induced it into entering the "contract." Coastal Corp., 852 S.W.2d at 720.
The court held that because the buyer never entered into a binding contract with the seller, it could not have relied on any misrepresentations to its detriment. Id.
In so holding, the court stated:
Where false representations or promises are made to induce another to act, and, before such other does act, he learns of the falsity of such representations or promises, it cannot of course be said that he relied upon them believing them to be true, for knowing of their falsity, he has not been deceived. Id. (quoting Thrower v. Brownlee, 12 S.W.2d 184, 186-87 (Tex. Comm. App. 1929)).