When do Preliminary Contracts Bind?

In a constantly evolving financial climate, it is likely that parties will seek to avoid agreements reached with other parties that are no longer profitable or commercially viable.  Such refusal to abide by agreements leads to disputes between parties, often over one issue:  whether the agreement was binding and enforceable.

Amcan Holdings v. Canadian Imperial Bank of Commerce

In a recent case in New York, Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce, 2010 NY Slip Op 00786, (“Amcan”), the Appellate Division of the Supreme Court of New York concluded that an executed “Summary of Terms and Conditions,” which delineated a proposed financing between lender and borrower, was not a formally binding agreement – but an “agreement to agree.”

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