Promises and Assent Flashcards
Lucy v. Zehmer - 196 Va. 493, 84 S.E.2d 516 (1954)
RULE
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 reasonable standard, manifest an intention to agree, it is immaterial what may be the real but unexpressed state of his mind.
CONCLUSION
The Court held that the contract was a binding contract of sale between the parties despite defendants’ claim they had not intended to sell their farm and that the sale contract had been intended as a joke. Defendants’ true intent in agreeing to sell their farm was not determinative so long as their words and actions warranted a reasonable person’s belief that a contract was intended. Plaintiffs reasonably believed the sale contract was a serious business transaction. The evidence suggested defendant husband was not too drunk to know what he was doing.
What is the formation of a contract continuum?
Overview of Contract Enforcement & Defense against Formation
Requirements of a Contract
Contract
(Second Restatement § 1)
A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes as a duty.
Promisor
(Second Restatement § 2 (2) )
The person manifesting the intention is the promisor.
Promise
(Second Restatement § 2 (1) )
A promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
Promisee
(Second Restatement § 2 (3) )
The person to whom the manifestation is addressed is the promisee.
Agreement
(Second Restatement § 3)
An agreement is a manifestation of mutual assent on the part of two or more persons.
Bargain
(Second Restatement § 3)
A bargain is an agreement to exchange promises or to exchange a promise for a performance or to exchange performances.
How may a Promise be made?
A promise may be stated in words either oral or written or may be inferred wholly or partly from conduct.
Effect of Misunderstanding
- There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and
- (a) neither party knows or has reason to know the meaning attached by the other; or
- (b) each party knows or each party has reason to know the meaning attached by the other.
- The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if
- (a) that party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or
- (b) that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party.
Raffles v Wichelhaus
(Peerless)
Where parties attach “materially different meanings” to their “manifestations” and neither party has reason to know of the meaning attached by the other, there is no “manifestation of mutual assent.”
Elements of Promissory Estoppel Claim
(1) A clear and definite promise;
(2) The promisor intended to induce reliance by the promisee, and the promisee relied to the promisee’s detriment; and
(3) the promise must be enforced to prevent injustice.
Acceptance by Promise
- First, the promise must be an expression of commitment. It cannot merely acknowledge receipt of the offer but must indicate an intent to be bound.
- Second, the commitment must be unconditional and not require any further action on the part of either the offeror or offeree.
- Finally, the return promise must not vary the terms of the offer. For this reason, a valid acceptance is said to be the “mirror image” of the offer. If the acceptance contains terms that are different from those of the offer, then it is not an acceptance but a rejection or counter-offer.
