## Facts

- Kenneth W. Miller II and Eric Flegenheimer each owned 50% of a document-shredding company and sought to restructure their relationship after it deteriorated.
- From 2011 through December 2013, they negotiated drafts of a buy–sell provision for their shareholders’ agreement, but Miller refused to sign a final draft on December 9, 2013.
- On December 26, 2013, Flegenheimer emailed Miller offering to sell his shares on terms largely reflecting prior draft language and appraisals, including a two-year “claw-back” feature tied to any resale of the company.
- On December 31, 2013, Miller emailed that he accepted the stated price and indicated he would send “definitive documents” by January 10, 2014.
- On January 9, 2014, Miller sent a detailed stock purchase agreement and a separate non-compete agreement that materially differed from the December 26 email, including a $50,000 price reduction and broader, more burdensome non-compete restrictions.
- On January 14, 2014, Flegenheimer refused to proceed with the sale.
- Miller sued for specific performance, asserting the December emails formed an enforceable agreement (or at least a binding preliminary agreement).

## Issues

1. Whether the December 2013 email exchange formed (a) a fully enforceable contract for the sale of Flegenheimer’s shares, (b) a binding preliminary agreement imposing a duty to negotiate remaining terms in good faith, or (c) no enforceable agreement.
2. Whether Vermont should recognize and apply a preliminary-agreement framework that enforces obligations to negotiate in good faith despite unresolved terms.

## Decision

- The Vermont Supreme Court reversed the trial court and remanded for entry of judgment for Flegenheimer.
- The court held the parties’ emails did not create an enforceable contract for sale of the shares.
- The court held the emails also did not create an enforceable preliminary agreement requiring good-faith negotiation.
- The court declined to adopt New York’s Type I/Type II preliminary-agreement approach.

## Legal Principles

- Contract formation depends on objective manifestations of intent and sufficiently definite agreement on essential terms.
- Where parties anticipate later “definitive” writings for a complex transaction, informal communications are less likely to show present intent to be bound.
- An attempted acceptance that materially changes price or other essential terms operates as a counteroffer, not an acceptance; no contract forms without acceptance of the counteroffer.
- Vermont courts are reluctant to enforce bare “agreements to negotiate” absent clear intent and definite content establishing a binding obligation.

## Conclusion

The court concluded that the email exchange reflected ongoing negotiations for a complex ownership transfer, with essential terms unresolved and later “definitive documents” contemplated; Miller’s later proposed agreements materially varied the offer and constituted a counteroffer that Flegenheimer never accepted, leaving no enforceable contract or duty to negotiate.


Miller v. Flegenheimer, 161 A.3d 524 (Vt. 2016)