Am Jur 2d - Contracts § 29

II. Formation of Contracts, C. Assent; Offer and Acceptance, 1. In General; Assent, § 29 - Necessity of mutual assent and intent to be bound, generally

There must be mutual assent or a meeting of the minds[1] at the same time,[2] on all the essential elements or terms to form a binding contract.[3] In some jurisdictions, mutual assent involves the issues of an intent to be bound by the agreement,[4] as well as definiteness of terms.[5] In determining if the parties had the mutual assent or meeting of the minds necessary to reach agreement, the courts apply an objective theory of intent whereby one party's intention is deemed to be that meaning a reasonable person in the position of the other contracting party would ascribe to the first party's manifestations of assent; in making that determination, the circumstances surrounding the making of the contract, such as correspondence and discussions, are relevant in deciding if there was a mutual assent to an agreement, and courts are free to consider such extrinsic evidence.[6]

Which terms are essential to a meeting of the minds, as required for an enforceable contract, depends on the agreement and its context and also on the subsequent conduct of the parties, including the dispute which arises and the remedy sought.[7] The omission of a material element from a contract renders the contract unenforceable because there has been no meeting of the minds.[8]

According to the Restatement, generally, the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.[9]

Practice Tip:

The question of whether a binding contract was entered into depends on the intention of the parties, and is a question of fact.[10]

If an ambiguity renders the alleged agreement too indefinite, even after the consideration of extrinsic evidence, for the court to determine the parties' intent, the contract cannot be enforced due to the absence of any discernable meeting of the minds.[11] Also, a failure to agree on or even discuss an essential term of a contract may indicate that mutual assent is lacking.[12]

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1   Galloway v. Santander Consumer USA, Inc., 819 F.3d 79 (4th Cir. 2016) (applying Maryland law) ; International Waste Industries Corp. v. Cape Environmental Management, Inc., 988 F. Supp. 2d 542 (D. Md. 2013) , aff'd, 588 Fed. Appx. 213 (4th Cir. 2014) (applying Maryland law) ; AgriCommodities, Inc. v. J.D. Heiskell & Co., Inc., 297 Ga. App. 210, 676 S.E.2d 847 (2009) ; David J. Sacks, P.C. v. Haden, 266 S.W.3d 447 (Tex. 2008) .

2   Graham v. HHC St. Simons, Inc., 322 Ga. App. 693, 746 S.E.2d 157 (2013) ; Baier v. Darden Restaurants, 420 S.W.3d 733 (Mo. Ct. App. W.D. 2014) ; Lanier v. Eastern Foundations, Inc., 401 S.W.3d 445 (Tex. App. Dallas 2013) .

3   Bishop v. Oakstone Academy, 477 F. Supp. 2d 876, 218 Ed. Law Rep. 429 (S.D. Ohio 2007) (applying Ohio law) ; Southeast Caissons, LLC v. Choate Const. Co., 784 S.E.2d 650 (N.C. Ct. App. 2016) ; Minster Farmers Coop. Exchange Co., Inc. v. Meyer, 117 Ohio St. 3d 459, 2008-Ohio-1259, 884 N.E.2d 1056 (2008) .
 If there is no agreement on one essential term of the contract, then there is no mutual assent, and, thus, no contract. DiMaggio v. Rosario, 52 N.E.3d 896 (Ind. Ct. App. 2016) .
 The absence of a fixed total price for services does not indicate a failure of the parties to reach a meeting of the minds with regard to the essential terms of the contract. David J. Sacks, P.C. v. Haden, 266 S.W.3d 447 (Tex. 2008) .
 It is essential that the minds of the parties be in agreement on material terms in order for a contract to be established. International Waste Industries Corp. v. Cape Environmental Management, Inc., 988 F. Supp. 2d 542 (D. Md. 2013) , aff'd, 588 Fed. Appx. 213 (4th Cir. 2014) (applying Maryland law) .

4   Galloway v. Santander Consumer USA, Inc., 819 F.3d 79 (4th Cir. 2016) (applying Maryland law) ; Howard Town Center Developer, LLC v. Howard University, 788 F.3d 321 (D.C. Cir. 2015) (applying District of Columbia law) ; O'Donnell v. O'Donnell, 79 A.3d 815 (R.I. 2013) .
 As to the requirement of assent as it relates to implied contracts, see § 15 .

5   Galloway v. Santander Consumer USA, Inc., 819 F.3d 79 (4th Cir. 2016) (applying Maryland law) .

6   Hart v. Hart, 297 Ga. 709, 777 S.E.2d 431 (2015) .

7   Certified Fire Prot. Inc. v. Precision Constr., 283 P.3d 250, 128 Nev. Adv. Op. No. 35 (Nev. 2012) .

8   Neiss v. Franze, 101 Misc. 2d 871, 422 N.Y.S.2d 345 (Sup 1979) .

9   Restatement Second, Contracts § 17(1) .

10   Vernon v. Assurance Forensic Accounting, LLC, 333 Ga. App. 377, 774 S.E.2d 197 (2015) , cert. denied, (Nov. 2, 2015); Young v. Hefton, 38 Kan. App. 2d 846, 173 P.3d 671 (2007) .

11   Vilseck v. Vilseck, 45 Va. App. 581, 612 S.E.2d 746 (2005) .

12   Malone v. Saxony Co-op. Apartments, Inc., 763 A.2d 725 (D.C. 2000) .

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