## Facts

- Dennis Farley managed four Kentucky Fried Chicken restaurants operated by Champs Fine Foods, Inc. in North Dakota and Minnesota.
- Farley’s employment agreement included an option to purchase up to 50% of the parent corporation’s stock if profit quotas were met; the parent rejected Farley’s attempted exercise for failure to meet quotas.
- The parties then negotiated a possible transaction outside the option agreement, disputing whether it involved stock or restaurant assets.
- Farley made written purchase proposals on June 3 and August 2, 1983; both were rejected.
- On September 12, 1983, Champs’ president/chair sent Farley a letter describing alternative sale/financing terms and stating the matter had taken too long and a conclusion was needed by October 1, 1983, otherwise management would be changed by October 15.
- On September 29, 1983, Farley called the president; the trial court found the president told Farley he would not enter into an agreement to sell the business.
- Later that day, Farley mailed a letter stating he accepted the September 12 terms.
- Champs refused to complete the sale, and Farley sued for specific performance to compel transfer of the four restaurants.

## Issues

1. Whether the September 12, 1983 letter was a definite offer capable of acceptance or merely part of ongoing negotiations.
2. If it was an offer, whether it was effectively revoked during the September 29 telephone call before Farley mailed his purported acceptance.
3. Whether a binding contract existed that could support specific performance.

## Decision

- The North Dakota Supreme Court affirmed the judgment dismissing Farley’s action.
- The court upheld the trial court’s finding that any offer to sell was withdrawn during the September 29 call before Farley mailed his acceptance letter.
- Because revocation preceded acceptance, no contract was formed and there was nothing to specifically enforce.

## Legal Principles

- An offer may be revoked at any time before acceptance if the revocation is communicated to the offeree.
- A purported acceptance sent after revocation is ineffective and cannot create a contract.
- Language indicating the parties must still “enter into an agreement” may show a communication is preliminary negotiation rather than a final, binding offer.
- Specific performance requires an enforceable contract; absent contract formation, the remedy is unavailable.

## Conclusion

Because the factfinder determined the seller communicated withdrawal of any willingness to sell before the buyer mailed his acceptance, contract formation failed, and the buyer could not obtain specific performance.


Farley v. Champs Fine Foods, Inc., 404 N.W.2d 493 (N.D. 1987)