Also known as: offers and acceptances · offer & acceptance · mutual assent
Written by attorneys — see sources below.
A process of contract formation by which parties manifest mutual assent to an exchange through an offer by one party followed by an acceptance by the other.
Orson Ochoa offered to sell Oasis Resorts a generator described as meeting industrial standards. Oasis Resorts accepted believing the term required a specific output level that differed materially from Orson Ochoa's understanding. Neither party knew or had reason to know of the other's attached meaning. No contract formed because the parties failed to manifest mutual assent to the same exchange.
Owen Ortega proposed to handle litigation for Olympia Steel in exchange for a flat fee if the company sent its files. Olympia Steel's counsel nodded and shook hands then immediately couriered the files. The conduct constituted a bargain manifesting mutual assent to exchange a promise for performance. A contract was formed.
Odessa Okada emailed Orbit Communications offering to provide consulting services for a stated monthly rate. Orbit Communications responded by sending its project files and authorizing preliminary work. The sequence of proposal followed by responsive conduct created the required manifestation of mutual assent. The parties formed a contract.
Orion Orlov mailed an offer to sell equipment to Orchard Farms on stated terms and left the power open for ten days. Orchard Farms mailed its acceptance on day eight. The acceptance completed the manifestation of mutual assent because the offer had supplied a continuing power that remained available. A contract resulted.
Odin Obeng offered to buy land from Odilia Okamura and invited acceptance by mail. Odilia Okamura placed her signed acceptance in the mailbox. The acceptance completed the manifestation of mutual assent at the moment of dispatch even though the letter had not yet reached Odin Obeng. A contract was formed.
Two parties discussed the sale of a farm over drinks and wrote out a signed memorandum stating the price and terms. One later claimed the writing was a joke. The objective manifestations of offer and acceptance created mutual assent. A contract was formed regardless of any unexpressed subjective intent.
W. O. Lucy and J. C. Lucy, complainants, brought suit against A. H. Zehmer and Ida S. Zehmer, defendants, seeking specific performance of an alleged contract to sell the Ferguson farm. The farm is located in Dinwiddie County and contains 471.6 acres. A. H. Zehmer had owned the farm for more than ten years after purchasing it for $11,000. The writing in question was prepared by A. H. Zehmer on December 20, 1952. It read: “We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer,” and was signed by both Zehmers. On that night around eight o’clock, W. O. Lucy entered the Zehmers’ restaurant in McKenney after deciding to attempt another purchase of the farm. During a discussion lasting thirty or forty minutes, Lucy and Zehmer negotiated the terms. Zehmer initially drafted the agreement in the singular before revising it to include his wife at Lucy’s request. Both men consumed drinks from a bottle Lucy had brought. Lucy testified he was not intoxicated and believed Zehmer was not either. Lucy took possession of the signed writing and left the premises insisting that he had purchased the farm. The next day Lucy contacted his brother J. C. Lucy to arrange for a half interest in the purchase. On December 22 Lucy engaged an attorney to examine the title, which was reported satisfactory on December 31. Lucy wrote to Zehmer on January 2 stating that he was ready to pay the $50,000 in cash. Zehmer replied by letter mailed January 13 asserting that he had never agreed or intended to sell the farm. The Zehmers contended that the writing was prepared as a joke while both parties were drinking heavily. Zehmer claimed he was “high as a Georgia pine” and intended only to call Lucy’s bluff regarding his ability to pay $50,000 in cash. Mrs. Zehmer testified that her husband whispered to her that the matter was a joke before she signed. A waitress observed the parties laughing, joking, and drinking. Depositions were taken. The trial court entered a decree dismissing the bill on the ground that the complainants had failed to establish their right to specific performance. The Lucys appealed from that decree.
A statement qualifies as an offer when it manifests willingness to enter a bargain so made as to justify the recipient in understanding that assent is invited and will conclude the deal. Conditional language that directly invites the offeree to conclude the bargain by performing the requested act satisfies the requirement. The explicit phrasing gives the recipient reason to understand that the requested performance will conclude the exchange.
Supporting sources
…of their intentions which are communicated between them. ” Clark on Contracts, 4 ed., § 3, p. 4. An agreement or mutual assent is of course essential to a valid contract but the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. If his words and acts, judged by a…
…will usually have deep roots in the expectations and intentions of most people. See Costigan, Implied-in-Fact Contracts and Mutual Assent, 33 Harv.L.Rev. 376, 383-385 (1920). : “The housing and sanitary codes, especially in light of Congress’ explicit direction for their enactment, indicate a strong and pervasive…
…and a reporter ordinarily believe they are engaged in making a legally binding contract. They are not thinking in terms of offers and acceptances in any commercial or business sense. The parties understand that the reporter's promise of anonymity is given as a moral commitment, but a moral obligation alone will not support a…
…enforce employment security agreements in the absence of evidence of independent consideration and an express manifestation of mutual assent. Although, as explained below, there may be some historical basis for imposing such limitations, any such basis has been eroded by the development of modern contract law and, accordingly,…
Conduct constitutes acceptance when it follows an offer that invited performance and supplies the required manifestation of assent. Prompt delivery of files together with allowance of preliminary research and hearing appearances demonstrates that the party understood it was commencing the relationship on the proposed terms. The actions align with the mode of acceptance invited by the offer itself.
Supporting sources
No contract forms if the parties attach materially different meanings to their manifestations and each knows or has reason to know the meaning attached by the other. Internal communications showing conscious awareness of divergent understandings of a key term such as intensity demonstrate that the parties proceeded despite known ambiguity. The decision to execute the writing anyway prevents formation of mutual assent on that essential term.
Supporting sources
Repeated occasions for performance over many months during which one party arrives outside stated windows and the other unloads without protest or reservation supply evidence that the parties treated the windows as flexible. The consistent failure to object demonstrates practical acceptance of a more lenient schedule. The conduct therefore establishes compliance under the parties' actual understanding.
Supporting sources