Also known as: material term of the contract · material terms · essential terms · material provisions
Written by attorneys · grounded in primary & secondary sources — see below
The provisions in an agreement that identify the parties' core obligations with sufficient clarity to permit enforcement or to satisfy formal requirements such as the statute of frauds.
Maya Malik, a lawyer, seeks to purchase a client's commercial property. She presents a written purchase agreement that details the price, closing date, and her dual role as both buyer and counsel. The client signs the document after receiving it, confirming understanding of those core provisions.
Mustafa Mahmoud and Metro Bank exchange letters about a five-year equipment lease. The signed memorandum identifies the equipment, rental amount, and lease duration but omits the delivery schedule. A court later determines whether the listed items suffice as the essential terms of the unperformed promises.
Select any source to read its text and confirm it supports the definition.
Marcus Mitchell signs a writing promising to leave his vacation home to his niece in exchange for her caregiving services. The document states the property and the services but contains no will reference. The niece later seeks to enforce the promise after Mitchell's death.
Miles Montgomery signs a promissory note presented by Mirage Hotels as a simple receipt for event deposits. The note actually contains an unconditional promise to pay a large sum. Montgomery later claims he lacked any reasonable opportunity to learn the instrument's true character or essential terms.
Megan Moore attends a safety briefing where Horizon Energy's representative describes a single page as an attendance sheet. The page actually contains a grant of long-term easements over her land. Moore signs without knowledge of the true character or essential terms of the document.
A misunderstanding prevents formation when the parties attach materially different meanings to an essential term and each knows or has reason to know of the other's meaning. In such cases there is no mutual assent to the same bargain. Courts treat the parties as never having agreed on that point.
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A signed writing is ineffective when one party misrepresents the character or essential terms of the document and the signer neither knows nor has a reasonable opportunity to learn the truth. The apparent assent is treated as no assent at all, so no contract is formed.
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A writing satisfies the statute of frauds if it states the essential terms of the unperformed promises with reasonable certainty. Omitted schedules may still allow enforcement when the identified parties, subject matter, and price supply an adequate basis for determining breach and remedy.
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…Step-Saver received the program, saw the terms of the license, and opened the program packaging. TSL contends that too many material terms were omitted from the telephone discussion for that discussion to establish a contract for the software. Second, TSL contends that its acceptance of Step-Saver's telephone offer was…