The opinion of the court was delivered by: MARVIN E. ASPEN
MARVIN E. ASPEN, District Judge:
Plaintiff Venture Associates Corporation ("Venture") originally brought this action against Zenith Data Systems Corporation ("Zenith") for breach of contract, but on remand from the Seventh Circuit we are left with only a claim that Zenith breached a preliminary agreement to bargain in good faith. Presently before us is Zenith's motion for summary judgment on the issue of damages. For the reasons set forth above, defendant's motion is granted in part and denied in part.
This case arises out of a business transaction gone awry. Beginning in 1991, Zenith began negotiating to sell the Heath Company ("Heath"), one of its subsidiaries which had not turned a profit for several years, to Venture. On March 31, 1991, Venture sent to Zenith's broker, Financiere Indosuez, a letter of intent outlining Venture's proposal to purchase the company for a total of $ 11 million. In addition to substantive terms, such as the nature of Venture's financing and warranties, the letter contained the following statement:
If the forgoing is acceptable to Seller, Seller should sign and return the enclosed copy of this letter. It is understood that this is merely a letter of intent subject to the execution by Seller and Buyer of a definitive Purchase Agreement (except for the following paragraph of this letter, which shall be binding upon and inure to the benefit of each of us and our respective successors and assigns) land] does not constitute a binding obligation on either of us.
However, notwithstanding the foregoing, this letter is intended to evidence the preliminary understanding which we have reached regarding the proposed transaction and our mutual intent to negotiate in good faith to enter into a definitive Purchase agreement . . . .
Richter Affidavit, Exb. 4. Although Zenith did not sign and return the letter, it responded by mail on June 11, 1991, stating that it would begin negotiating the sale of Heath according to the terms and conditions of the March 31 letter. This proposal was accepted by Venture the following day.
In subsequent negotiations, however, the parties encountered substantial difficulties. Zenith demanded a post-closing adjustment of up to $ 4 million in the purchase price, as well as financial guarantees by Venture. These terms proved unacceptable to Venture, and the two parties never executed a final purchase agreement. Venture then filed this diversity action, alleging that Zenith breached an agreement to sell Heath by interjecting these terms at the last minute.
II. Summary Judgment Standard
A motion for summary judgment will be granted if "there is no genuine issue of material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). This standard places the initial burden on the moving party to identify "those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (quoting Fed. R. Civ. P. 56(c)). Once the moving party has met this burden, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(c); see Maxwell v. City of Indianapolis, 998 F.2d 431, 433 (7th Cir. 1993). In deciding a motion for summary judgment, the facts must be read in a light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
Defendant contends that even if it is found liable, Venture is only entitled to recover the out-of-pocket expenses it paid in reliance on Zenith's promise to bargain in good faith. Zenith argues that because Venture is suing on a preliminary agreement, rather than a final purchase agreement, its recovery is limited to reliance damages. Defendant also maintains that Venture's claim for the profits it could have made had the transaction been completed is too speculative. Plaintiff responds that Illinois law does not restrict its recovery simply to reliance damages, but also allows it to recover the benefit of its lost bargain. Venture also argues that so long as lost profits can be calculated with reasonable certainty, and were contemplated by the parties, they are ...