Coley v. Lang

339 So. 2d 70 (Ala. Civ. App. 1976)

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Nature of the Case

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Facts

P sued D for specific performance. P alleged an agreement whereby D was to purchase the stock of P's corporation. The price was to be $60,000. The specific performance prayed for was the payment of $60,000. The court ordered judgment for P in the amount of $7,500 for reliance on the agreement. P and D entered into discussions concerning the purchase of IAS Corporation. P owned the vast majority of the stock of IAS. D only desired to purchase the name and goodwill of IAS. D's purpose was to be in a favorable position to bid on government contracts. The parties contacted an attorney, who represented D. A document was drafted and signed by each party. The letter contained some terms of the agreement, but stated: “We agree together that on or before September 18, this letter agreement will be reduced to a definitive agreement binding upon all of the parties hereto and accomplishing the sale and purchase contemplated by this agreement.” D discovered that P had not sought approval by the IRS and because of that the sale could not occur by 9-18-1972. D informed P the deal would not work and withdrew. P sued D. The court denied specific performance as the agreement was not specific enough to be enforced. The court granted P reliance damages based on testimony that P had lost profits from not bidding on two contracts. D appealed.