Chapter 14: Brown v. Cara, the Type II Preliminary Agreement, and the option to unbundle
AbstractTraditionally, preliminary agreements were not enforceable. In TIAA v. Tribune, Judge Leval held that some such agreements required that the parties negotiate in good faith, so-called Type II agreements. This chapter analyses one case, Brown v. Cara, in which a court found that the parties had entered into a Type II agreement. Examination of the record leads to two conclusions. First, the record provided no support for the Type II characterization. Second, the core problem for the parties was pricing of the option to unbundle. There were a number of mechanisms available to them for pricing the option explicitly; recognition of the good faith duty to negotiate was unnecessary.
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