The Georgia Court of Appeals upheld a decision to hold Turner Broadcasting System to its apparent verbal agreement to transfer ownership of the Hawks and Thrashers franchises, ordering the payment of the original $281-million award.

Facts: During the course of negotiations with Texas business man David McDavid, Turner entered into a Letter of Intent that precluded binding negotiations without a  signed agreement. However, that contract had expired by the time Turner representatives purportedly said “we have a deal” in continued verbal negotiations. McDavid had prepared a press release to announce the purchase when Turner retracted the offer, prompting McDavid to sue for breach of contract, fraud and sharing confidential information.

Holding: The court held that Turner breached its contract with McDavid because their oral agreement was binding despite both parties anticipating further written contracts, and despite the expired terms of the letter of intent. Barring successful petition to the Georgia Supreme Court, Turner is to pay damages to the order of $281 million, plus interest.

Practical Pointers: One should be circumspect in negotiating deals, even when written agreement is expected.