Introduction

Mutual Assent and Intent

Introduction

Suppose two people spend an afternoon haggling over a used truck. One says, "Fine, that works for me," and shakes on it. A week later that person tries to back out, explaining that they never really meant to sell. A second dispute looks very different on its surface: a supplier ships goods to a buyer who never said yes in words but accepted delivery and used the goods. Both disputes ask whether the parties reached an agreement, and in both the answer depends on what each person showed the other, because no one can examine another person's private state of mind.

The Restatement (Second) of Contracts supplies the governing text. Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance.¹ That manifestation may be made wholly or partly by written or spoken words, by other acts, or by failure to act.² Conduct has limits as evidence of assent. It counts only if the actor intends to engage in it and knows or has reason to know that the other party may infer assent from it.³ The reason for this focus on outward signs follows from the situation of the person receiving them. That person can rely only on what the other side has said or done, so a rule that let hidden reservations undo visible commitments would make every handshake provisional. The first analytical question in any formation problem is therefore what each party actually manifested, judged from the standpoint of a reasonable observer.

That starting point has consequences in several directions. Conduct may manifest assent even when the actor does not in fact assent, and a contract formed that way may be voidable for fraud, duress, mistake, or another invalidating cause.⁴ A promise may be stated in words or inferred wholly or partly from conduct.⁵ Neither real nor apparent intention that a promise be legally binding is essential, although a manifestation that a promise shall not affect legal relations may prevent formation.⁶ Assent ordinarily takes the form of an offer followed by an acceptance,⁷ yet it may exist even when neither can be identified and the moment of formation cannot be fixed.⁸ The chapter takes these in order. It begins with the vocabulary of contract, promise, and agreement, then turns to the objective test, the ways assent is manifested, express and implied promises, intent to be bound, offer and acceptance, and the more flexible approach of the UCC. The first step is the definitions on which every later rule depends.