An LLC member promised to accept “any terms” for the sale of the parties’ entity if another member would pay certain of his personal debts. That member would later renege and agree to a different deal from a second buyer. When that member also refused the terms of the LLC sale to the second party, the other members removed the refusing member and moved toward consummating the sale. When litigation was commenced among the members, that second buyer backed out. The LLC and the remaining members sued the excluded member for, among other things, breach of contract.
Addressing the breach claim in connection with the first potential buyer, while agreeing with the principle that to enforce a contract the terms of the agreement must have been sufficiently clear and capable of being agreed to, the Second Department held that an enforceable agreement can be found even if not all of the terms are “‘absolutely certain [ ]’” so long that the parties intended to agree to an agreement that left a term undefined. The court stated “[c]ontrary to the defendant’s assertion, an agreement to accept a reasonable offer is not necessarily unenforceable; instead, ‘a party may agree to be bound to a contract even where a material term is left open’ provided there is ‘sufficient evidence that both parties intended that arrangement.’”
Additionally, the term “reasonable offer” can be sufficiently definite and not unreasonably vague. “Here, since the agreement involved offers by third parties, leaving open what constituted a ‘reasonable offer’ was not inappropriate. There were objective criteria, such as whether an offer comported with the company’s value as established by an analysis of its financial records, which could be used to determine whether a given offer was ‘reasonable.’”