In 1993, TOG Acquisition Co. attempted to acquire the Orleander Group, a manufacturer of bicycle accessories, but failed for lack of financing. Orleander then granted to Herrick Co. an exclusive right to negotiate for the sale of the business.
In August, representatives of TOG, Herrick, and SCS Communications, Inc., signed a letter in which they agreed “to work together to acquire the business of the Orleander Group.” The “letter agreement” provided that the parties would contribute “equal amounts of capital” and that all of the terms of the acquisition required the approval of each party. On November 19, TOG and SCS told Herrick that it was out of the deal and, ten days later, acquired Orleander without Herrick. Herrick filed a suit in a federal district court against SCS and others, alleging, among other things, that the “letter agreement” was a contract to establish a joint venture, which TOG and SCS had breached. The defendants filed a motion for summary judgment. In whose favor should the court rule? Why?