Leaving Material Terms for Later

We’ll start off yesterday’s flurry of opinions with CTMI, LLC v. Fischer, which reiterates the familiar principle that agreements to agree don’t actually bind the parties to reach an agreement. In this instance, the parties entered into an asset purchase agreement that contained an earn-out provision. The earn-out provided that the parties would have to “mutually agree” on the percentage of completion of projects that were in progress as of December 31, 2010. The trial court ruled that provision was enforceable, but the Court of Appeals disagreed. Without the “mutually agreed” percentages required to calculate the earn-out, there was no formula that could be applied to calculate what was owed, rendering the earn-out unenforceable as a matter of law.

CTMI, LLC v. Fischer, No. 05-11-00970-CV