Case Citation
Legal Case Name

Quake Construction, Inc. v. American Airlines, Inc. Case Brief

Illinois Supreme Court1990Docket #1944509
565 N.E.2d 990 141 Ill. 2d 281 152 Ill. Dec. 308 1990 Ill. LEXIS 151 Contracts Civil Procedure

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Case Brief Summary & Legal Analysis

Contracts Focus
4 min read

tl;dr: A contractor sued for breach of contract based on a letter of intent after being terminated from a project. The court found the letter’s language was ambiguous as to whether it was a binding contract, allowing the contractor’s lawsuit to proceed to trial.

Legal Significance: This case establishes that a letter of intent containing conflicting terms—some indicating a present agreement and others contemplating a future formal contract—is ambiguous, creating a question of fact regarding the parties’ intent to be bound that cannot be resolved on a motion to dismiss.

Quake Construction, Inc. v. American Airlines, Inc. Law School Study Guide

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Case Facts & Court Holding

Key Facts & Case Background

Quake Construction, Inc. (Quake) submitted a bid for a construction project for American Airlines, Inc. The project manager, Jones Brothers Construction Corporation (Jones), orally notified Quake that it had been awarded the contract. To facilitate Quake’s hiring of subcontractors, Jones sent Quake a detailed letter of intent dated April 18, 1985. The letter stated, “We have elected to award the contract for the subject project to your firm” and “this notice of award authorizes the work.” It specified the scope of work, a lump sum price of $1,060,568, and a start date for the week of April 22, 1985. However, the letter also stated that a formal “contract agreement outlining the detailed terms and conditions is being prepared” and included a cancellation clause: “Jones Brothers Construction Corporation reserves the right to cancel this letter of intent if the parties cannot agree on a fully executed subcontract agreement.” On April 25, after a preconstruction meeting where Jones introduced Quake as the general contractor, American terminated Quake’s involvement. Quake sued for breach of contract and promissory estoppel, alleging it incurred expenses in reliance on the award.

Court Holding & Legal Precedent

Issue: Is a letter of intent that contains detailed terms of an agreement and language of immediate authorization, but also includes a clause reserving the right to cancel if a formal contract is not executed, ambiguous as to the parties’ intent to be bound, thereby precluding dismissal of a breach of contract claim?

Yes. The letter of intent is ambiguous as to the parties’ intent Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore

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Legal Issue

Is a letter of intent that contains detailed terms of an agreement and language of immediate authorization, but also includes a clause reserving the right to cancel if a formal contract is not executed, ambiguous as to the parties’ intent to be bound, thereby precluding dismissal of a breach of contract claim?

Conclusion

This case establishes that conflicting language of finality in a letter of Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proiden

Legal Rule

Whether a letter of intent is an enforceable contract depends on the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Ex

Legal Analysis

The court determined that the letter of intent contained contradictory provisions that Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint

Flash-to-Full Case Opinions

Flash Summary

  • A letter of intent is an enforceable contract only if the
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Exce

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