Contracts

Mutual Assent

A contract is an agreement to do or not to do a certain thing. (Cal.Civil Code § 1549) An essential prerequisite to the formation of a contract is an agreement, i.e., mutual assent to the same terms. Consent is not mutual, unless the parties all agree upon the same thing in the same sense.

The consent of the parties to a contract must be:

1. Free;

2. Mutual; and,

3. Communicated by each to the other. (Cal.Civ.Code § 1565)

Mutual assent is ordinarily established by a process of offer and acceptance. To discover whether parties have assented to an agreement courts examine both their words and deeds. There are a great variety of ways to reach an agreement as there is no standard verbal formula or prescribed conduct which invariably signifies assent. Even in cases where the offer and acceptance cannot be identified, thinking in terms of offer and acceptance is a helpful analytical tool.

Two Contrasting Theories of Contract Objective vs. Subjective.

Should the assent of the parties be actual mental assent so that there is a "meeting of the minds" or should assent be determined solely from objective manifestations of intent, namely what a party says and does rather than what he subjectively intends or believes or assumes? Under the objective theory, the mental assent and intent of the parties is irrelevant. The objective theory has been dominant. A party's intention will be held to be what a reasonable person in the position of the other party would conclude his manifestation to mean. (Lucy v. Zehmer (1954 Sup.Ct. VA) 84 S.E.2d 516.)

Oral and Written Contracts

A contract may be oral, written, or partly oral and partly written. Unless some law provides otherwise, an oral, or a partly oral and partly written contract, is as valid and enforceable as a written contract. (Cal.Civil Code § 1622)

Express and Implied Contracts

A contract may be express or implied. In an express contract, the existence and terms of the contract are stated in words or the writings of the parties. In an implied contract, the existence and terms of the contract are inferred from the conduct of the parties. (Cal.Civil Code § 1619, 1620, 1621) The distinction between an express and an implied contract relates only to the manner in which the agreement is shown. Both types are based upon the express or apparent intention of the parties.

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