Butler v. Balolia

736 F.3d 609 (1st Cir. 2013)

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Nature of the Case

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Facts

Butler (P) is an inventor who has spent years researching and developing safety technology for cutting tools. P developed 'Whirlwind' technology, which relies on both existing and pending patents. D is the president of Grizzly Industrial, Inc. He sought to purchase the Whirlwind technology, and after some initial haggling, the two men signed a letter of intent (LOI) in April of 2012. The LOI memorializes the parties' mutual intention 'to negotiate and enter into a separate Purchase Agreement by June 20, 2012,' describes the technology to be purchased in some detail, and specifies a purchase price 'payable upon closing.' It also stipulates that the parties 'will use their best efforts to negotiate and attempt to agree to terms for the Purchase Agreement' and that P will refrain from negotiating with any other prospective purchasers before the signing deadline. No purchase agreement was ever signed. P blames D. D claims to have discovered deficiencies in the Whirlwind technology. P sought a declaration that the LOI was an enforceable contract, pecuniary damages for breach of contract and breach of an implied covenant of good faith and fair dealing, and damages for violation of the Massachusetts Consumer Protection Act. D filed a motion to dismiss. The district court granted the motion to dismiss. It reasoned that the LOI was not an enforceable contract of any kind under Washington law and, therefore, that all of P's claims failed. P appealed.