Gardiakos v. Vanguard Communications, Inc.

• Decision Date: 14 May 1976
• Docket Number: No. 62909,62909
• Citation: Gardiakos v. Vanguard Communications, Inc., 38 Ill.App.3d 937, 350 N.E.2d 210 (Ill. App. 1976)
• Parties: Betty GARDIAKOS and Sam Gardiakos, Plaintiffs-Appellants, v. VANGUARD COMMUNICATIONS, INC., et al., Defendants-Appellees.
• Court: Appellate Court of Illinois

Page 210

350 N.E.2d 210

38 Ill.App.3d 937

Betty GARDIAKOS and Sam Gardiakos, Plaintiffs-Appellants, v. VANGUARD COMMUNICATIONS, INC., et al., Defendants-Appellees.

No. 62909.

Appellate Court of Illinois, First District, Fifth Division.

May 14, 1976.

Foss, Schuman & Drake, Chicago, for plaintiff-appellants.

Donald J. Duffy and Kirkland & Ellis, Chicago, for Vanguard Communications, Inc. and James F. Hoffman, defendants-appellees.

DRUCKER, Justice.

This is an appeal from an order of the trial court dismissing plaintiffs' amended complaint. Plaintiffs brought suit for damages, alleging that defendant, Vanguard Communications, Inc., had breached the terms of a contract it had executed by refusing to sell the assets of radio station WVVX-AM to Betty Gardiakos. Plaintiffs' amended complaint prayed for damages against Vanguard and its president, James Hoffman, and against Hamilton-Landis & Associates who acted as brokers in the sale. After a hearing the trial court granted defendants' motion to dismiss, ruling that there was an unambiguous contract for purposes of the motion but that the contract was unenforceable since it lacked mutuality in that it gave plaintiffs an unrestricted right to cancel the agreement.

Plaintiffs submitted their offer to acquire the assets of the radio station in the form of a letter of intent setting forth the terms and conditions of the purchase in substantial detail. The pertinent terms provided that plaintiffs were to 'loan' Vanguard $12,000 within 15 days after the acceptance of the offer in order for Vanguard to meet obligations owed to the previous owners of the station. This loan was to be applied towards the purchase price of $147,500 at the time of sale. One of the requirements of the offer was that Vanguard would submit various documents to plaintiffs for their inspection within five days of acceptance. After listing these documents, the letter provided that:

'Buyer may, at its option, within 5 days of receiving said documents, withdraw its offer set forth in this letter and its obligations hereunder shall be null and void.'

The letter concluded by requesting that a copy be signed and returned if the offer was acceptable to Vanguard and was signed by Betty Gardiakos as buyer and her brother Sam Gardiakos as guarantor. The offer was accepted by James Hoffman for Vanguard and dated June 10, 1974. On June 20, 1974, Vanguard's attorneys informed the Gardiakoses that it was cancelling the agreement due to possible difficulties in fulfilling certain conditions such as obtaining approval by the Federal Communications Commission of an 'assignment' of the station's license. None of the terms of the agreement have been performed.

Opinion

Construing the letter of intent without the aid of extrinsic evidence, it is clear that the agreement lacked mutuality. Mutuality of obligation is lacking, and neither party is bound to an executory contract where one of the parties has the right to arbitrarily terminate it. (Snyder v. Hamilton, 39 Ill.App.2d 352, 189 N.E.2d 97; Hodorowicz v. Szulc, 16 Ill.App.2d 317, 147 N.E.2d 887; Schoen v. Caterpillar Tractor Co., 103 Ill.App.2d 197, 243 N.E.2d 31.) The provision of the agreement which allowed plaintiffs five days to withdraw without establishing conditions for such a withdrawl rendered the contract unenforceable.

Although conceding that the letter of intent apparently gives them an unconditional right to cancel, plaintiffs contend that it was the intention of the parties to the agreement that the power to withdraw was conditioned upon the discovery of misrepresentations which might be disclosed by an inspection of the documents listed in the letter. Plaintiffs urge that the court erred in dismissing the complaint since the contract was ambiguous and that at a trial parol evidence would have been admissible to show that it was the intention of the parties that the right to withdraw was to be exercised only if...