“Agreements to Agree” May Not be Enforceable

By: Todd Reuter, K&L Gates, Spokane/Coeur D’Alene

Spokane Structures, Inc. v. Equitable Inv., LLC, 148 Idaho 616, 226 P.3d 1263 (2010)

"Agreements to agree" may not be enforceable.  Here, a contractor signed a one-page document entitled “Design/Build Agreement” that provided that the contractor would “design, engineer, and draft plans in preparation of all documents/drawings required to enable the owner and contractor to agree on a final design and cost of construction to be performed.”  The contractor presented a final design plan to the landowner, but the landowner decided not to follow through with the project.  The contractor sued for specific performance, trying to force the owner to pay him for work.

The Idaho Supreme Court held that the agreement was not a binding contract; instead, it was “merely an agreement to agree.”  Because the parties left for future agreement both the plans and specifications designing the scope of the work to be done and the contract price, which were essential, interrelated terms, no enforceable contract came into being.  The case was ultimately remanded to the trial court for further consideration consistent with the opinion.

Be careful when agreeing to agree.  You may find you cannot recover for your time, money and resources.

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