Introduction to Mutual Assent

Question 1

How is a party’s manifestation of assent judged?

Answer 1

By the objective reasonable interpretation of his outward expression of consent
and not by his subjective intent. Words and conduct of the parties will normally be given the same meaning that would be given by a reasonable person in the same
circumstances. Case Example: Lucy v. Zehmer

Question 2

Is there an exception to the Objective Standard interpretation of a party’s manifestation of assent?

Answer 2

Yes, the Rule Whose Meaning Prevails

(1) Where the parties have attached the same meaning to a
promise or agreement or a term thereof, it is interpreted in
accordance with that meaning.
(2) Where the parties have attached different meanings to a
promise or agreement or a term thereof, it is interpreted in
accordance with the meaning attached by one of them if at the
time the agreement was made
(a) that party did not know of any different meaning
attached by the other, and the other knew the meaning
attached by the first party; or
(b) that party had no reason to know of any different
meaning attached by the other, and the other had reason to
know the meaning attached by the first party.
(3) Except as stated in this Section, neither party is bound by
the meaning attached by the other, even though the result may
be a failure of mutual assent.
- Restatement (Second) of Contracts §201

Question 3

What is the analytical framework for Mutual Assent? and Exceptions?

Answer 3

The overarching rule is:
1. There is an outward expression and
2. Objective, reasonable meaning.

Exceptions:
1. where parties agree on a different interpretation,
2. where one party knows (or should have known) of the
different interpretation, or
3. cases of misunderstanding.