## Facts

- Taco Tico Acquisition Corp. and related parties negotiated to acquire Del Taco, whose owners included W.R. Grace & Co.-Conn.
- In August 1990, the parties executed a letter of intent describing proposed acquisition terms, including lease-and-option arrangements and financing/collateral terms.
- The letter of intent expressly stated it was “in principle only,” conditioned on further investigation, and that no party would have any legal obligation unless and until a formal agreement was executed and delivered; it also stated that no “estoppel” or other obligation would be implied.
- On the same date, the parties entered a management services agreement under which Taco Tico would manage both companies’ operations during the acquisition effort for $10 per month.
- Taco Tico provided management services but later faced financial difficulty and did not pursue closing under the letter of intent’s terms, instead proposing different arrangements.
- Del Taco later informed Taco Tico the acquisition would not occur and terminated the management services agreement.
- Taco Tico sued for, among other claims, promissory estoppel based on alleged assurances the deal would be completed and quantum meruit for management services.
- A jury rejected Taco Tico’s fraud and rescission claims but awarded damages on promissory estoppel and quantum meruit; Del Taco appealed.

## Issues

1. Whether an express “no obligation/no estoppel unless a formal agreement is executed” disclaimer in a letter of intent makes reliance on alleged promises to complete the transaction unreasonable as a matter of law, barring promissory estoppel.
2. Whether Taco Tico could recover in quantum meruit for management services despite a written management agreement setting compensation at $10 per month.

## Decision

- The court reversed the judgment on the promissory estoppel verdict, holding Del Taco was entitled to judgment as a matter of law on that claim.
- The court allowed the quantum meruit recovery to stand, concluding the evidence supported an award for the reasonable value of management services benefiting Del Taco despite the nominal contract fee.
- The result was a partial reversal and partial affirmance of the judgment.

## Legal Principles

- Promissory estoppel requires reasonable reliance; reliance is unreasonable as a matter of law when sophisticated parties, advised by counsel, agree in writing that no commitment or estoppel arises unless and until a formal agreement is executed.
- A nonbinding letter of intent that expressly disclaims legal obligation and disclaims implied “estoppel” can bar promissory-estoppel liability based on pre-contract assurances about consummating the transaction.
- Quantum meruit may permit recovery of the reasonable value of services that conferred a benefit, even where a related contract specifies only nominal payment, if the circumstances and evidence support a finding of uncompensated benefit.

## Conclusion

The court enforced the letter of intent’s explicit no-obligation/no-estoppel disclaimer to defeat promissory estoppel because reliance on contrary assurances was legally unreasonable, while permitting quantum meruit damages for management services that conferred a benefit notwithstanding a nominal contractual fee.


W.R. Grace & Co.-Conn. v. Taco Tico Acquisition Corp., 216 Ga. App. 423, 454 S.E.2d 789 (Ct. App. 1995)