Wednesday, March 17, 2010
Proving that a contract was formed - How is contract entered into in Texas?
MAKING A LEGALLY ENFORCEABLE DEAL: CONTRACT FORMATION EXPLAINED
In its simplest terms, a contract is established when proven by a preponderance of the evidence that an offer is accepted, accompanied by consideration. See Domingo v. Mitchell, 257 S.W.3d 34, 39-40 (Tex.App.-Amarillo 2008, pet. denied). To determine whether there was an offer and acceptance, and therefore a "meeting of the minds," courts use an objective standard, concerning what the parties did and said, not their subjective states of mind. See Komet v. Graves, 40 S.W.3d 596, 601 (Tex.App.-San Antonio 2001, no pet.).
"Meeting of the minds" describes the mutual understanding and assent to the agreement regarding the subject matter and the essential terms of the contract. Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.App.-Dallas 1999, pet. denied). Where this element is contested, as here, the determination of the existence of a contract becomes a question of fact. Hallmark v. Hand, 885 S.W.2d 471, 476-77 (Tex.App.-El Paso 1996, writ denied).
Further, parties may agree to the material terms of a contract but leave other matters open for later negotiation; it is only when an essential term is left open for future negotiation that no binding contract exists. Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759, 766 (Tex.App.-El Paso 2004, no pet.); Komet v. Graves, 40 S.W.3d at 602.
Written contracts may also consist of multiple documents; City of Houston v. Clear Channel Outdoor, Inc., 233 S.W.3d 441, 445 (Tex.App.-Houston [14th Dist.] 2007, no pet.), and writings may be considered together if they pertain to the same transaction. City of Keller, 168 S.W.2d at 811. See Jones v. Kelley, 614 S.W.2d 95, 98 (Tex. 1981) (separate instruments executed at the same time, for the same purpose, and in the course of the same transaction are to be considered as one instrument and construed together).
In addition, if one party signs a contract, the other may accept by his or her acts, conduct, or acquiescence in the terms of the contract. DeClaire v. G. & B. McIntosh Family Ltd. P'ship, 260 S.W.3d 34, 44 (Tex.App.-Houston [1st Dist.] 2008, no pet.) (collected cases cited therein).
SOURCE: 07-08-0344-CV - 3/12/2010 (Amarillo Court of Appeals)