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Behrens v. Behrens6/22/2005
binding contract.
[ .] Behrens argue that their Initial Agreement was merely a "letter of intent" that was not a binding contract. Behrens assert that the legal nature of the Initial Agreement was a question of law for the trial court and that they were entitled to summary judgment on this issue.
[ .] Wedmore contends that the trial court's denial of summary judgment was appropriate. Wedmore asserts that there were genuine issues of material fact concerning the binding nature of the Initial Agreement. Alternatively, he asserts that the Initial Agreement was a binding contract as a matter of law.
[ .] Our standard of review for summary judgment is well-settled:
In reviewing a grant or denial of summary judgment . . . we must determine whether the moving party demonstrated the absence of any genuine issue of material fact and [established] entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party[,] and reasonable doubts should be resolved against the moving party.... . . . . Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied.
Braun v. New Hope Township, 2002 SD 67, , 646 NW2d 737, 739 (citing South Dakota State Cement Plant Comm'n v. Wausau Underwriters Ins. Co., 2000 SD 116, , 616 NW2d 397, 400-401).
[ .] The trial court denied summary judgment, concluding that the jury was required to resolve factual issues concerning the conduct and intent of the parties to determine whether the Initial Agreement was a binding contract. The trial court stated: "I think the matter of whether there was a valid contract at that time is a question of fact for the jury. I'll instruct them on contracts and they can make that decision." The trial court ultimately instructed the jury on the principles of law governing the formation of binding agreements as well as preliminary agreements that are not intended to be a final and complete contract.
[ .] We have held that, generally, the " xistence of a valid contract is a question of law." In re Estate of Neiswender, 2000 SD 112, , 616 NW2d 83, 86 (citations omitted). Questions of law are reviewed de novo. Regalado v. Mathieson, 2004 SD 87, , 684 NW2d 67, 70 (citation omitted). "If in dispute, [however,] the existence and terms of a contract are questions for the fact finder." Morrisette v. Harrison Int'l Corp., 486 NW2d 424, 427 (Minn 1992) (citation omitted).
[ .] Behrens contend that the Initial Agreement was not a binding contract because: (a) it expired; (b) the parties' intent and conduct established that it was a non-binding agreement; (c) the agreement lacked essential terms and parties; and (d) Behrens received no consideration for the agreement. Although contentions (a), (c), and (d) are often legal questions, and although contention (b) is generally factual in nature, there is some overlap in this case. We therefore examine these contentions and the record to determine whether the Initial Agreement was a non-binding agreement as a matter of law, and whether there were disputed issues of material fact concerning the formation of a binding contract. Ultimately, if questions of fact existed, or if Behrens were not entitled to summary judgment as a matter of law, no prejudicial error occurred in submitting this issue to the jury.
a. Expiration/ Extension of the Initial Agreement
[ .] The Initial Agreement was executed on April 16, 1997. It provided that the agreement would expire 90 days after execution and that closing was to occur by June 30, 1997. It also provided that the " uyer may extend this date by
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