law-contract-formation | existence of a valid binding contract | meeting of the minds on material terms |
elements of contract | failure of consideration | lack vs. failure of consideration in contract context |
CONTRACT FORMATION IN TEXAS
Parties enter into a binding contract when the following elements exist: an offer; an acceptance in strict
compliance with the terms of the offer; a meeting of the minds; each party's consent to the terms; and
execution and delivery of the contract with the intent that it be mutual and binding. Copeland v. Alsobrook, 3
S.W.3d 598, 604 (Tex.App.-San Antonio 1999, pet. denied).
"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).
Mutual assent, concerning material, essential terms, is a prerequisite to formation of a binding, enforceable
contract. T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.1992). Parties, however,
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
596, 602 (Tex.App.-San Antonio 2001, no pet.). The determination of whether there is a meeting of the
minds, and thus offer and acceptance, is based upon objective standards of what the parties said and did
and not on their subjective state of mind. Copeland, 3 S.W.3d at 604.
SIGNATURE AS EVIDENCE OF ASSENT
Evidence of mutual assent in written contracts generally consists of signatures of the parties and delivery
with the intent to bind. See Angelou v. African Overseas Union, 33 S.W.3d 269, 278 (Tex. App.—Houston
[14th Dist.] 2000, no pet.) (citing Hallmark v. Hand, 885 S.W.2d 471, 476 (Tex. App.—El Paso 1994, writ
denied), for the proposition that one of the elements generally required to create an enforceable contract is
“[e]xecution and delivery of the contract with an intent that it become mutual and binding on both parties”).
"Under standard contract principles, the presence or absence of signatures on a written contract is relevant
to determining whether the contract is binding on the parties." In re Bunzl USA, Inc., 155 S.W.3d 202, 209
(Tex. App.—El Paso 2004, no pet). A contract need not be signed by the parties to be binding, but the
parties may insist upon signing as a condition precedent to contract formation. Simmons & Simmons Constr.
Co. v. Rea, 286 S.W.2d 415, 418 (Tex. 1956). "[T]he question of whether a written contract must be signed
to be binding is a question of the parties' intent." In re Bunzl, 155 S.W.3d at 209. "[I]f the parties have
unconditionally assented to terms stated in an unsigned document, the document constitutes a binding
written contract, regardless of whether it is signed." Id. (citation omitted).
CONTRACT FORMATION WITHOUT SIGNATURE
Texas law "recognizes that a contract need not be signed to be `executed' unless the parties explicitly
require signatures as a condition of mutual assent." Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc.,
323 S.W.3d 151, 157 (Tex. 2010). Manifestations of intent through actions and words may demonstrate
delivery of a contract and enable its enforcement. Wincheck v. Am. Express Travel Related Servs. Co., 232
S.W.3d 197, 204 (Tex. App.-Houston [1st Dist.] 2007, no pet.)
Courts have held that an exchange of e-mails between contracting parties is a "signed" writing that may
satisfy the UCC statute of frauds. See, e.g., Copeland Corp. v. Choice Fabricators Inc., 345 F. App'x 74, 77
(6th Cir. 2009) (holding that an email that identified the sender by name was a signed writing under Ohio's
enactment of the UCC); Cloud Corp. v. Hasbro, Inc., 314 F.3d 289, 296 (7th Cir. 2002) (holding that an e-
mail satisfied the UCC's statute of frauds because neither the UCC's words nor purpose require a
handwritten signature); Int'l Casings Grp., Inc. v. Premium Standard Farms, Inc., 358 F. Supp. 2d 863, 873
(W.D. Mo. 2005) ("[I]t is clear that [the e-mail senders], by hitting the send button, intended to presently
authenticate and adopt the content of the e-mails as their own writing. This is enough to satisfy the UCC
given the breadth of its definition of signature. . . .").
CONTRACT FORMATION GENERALLY | AGREEMENT TO ARBITRATE
Mid-Continental Casualty Co. v. Glober Enercom Mgmt, Inc., No. 09-0744 (Tex. Oct. 1, 2010)(per curiam)
(insurance coverage, exclusions, contract formation, unilateral contract, formation by act other than signing
of contract offer, contract construction)
MID-CONTINENT CASUALTY COMPANY v. GLOBAL ENERCOM MANAGEMENT, INC.; from Harris County;
14th district (14-07-01006-CV, 293 SW3d 322, 07-21-09)
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without
hearing oral argument, the Court affirms in part and reverses in part the court of appeals' judgment and
Per Curiam Opinion [pdf]
View Electronic Briefs in 09-0744 MID-CONTINENT CASUALTY CO. v. GLOBAL ENERCOM MANAGEMENT,
Vanegas v. American Energy Servcies (pdf), No. 07-0520 (Tex. Dec. 18, 2009) (Green)(unilateral contract,
contract formation and validity, enforceability)(illusory promise at the time it was made, promise became
enforceable upon performance)
ED VANEGAS, JIMMY D. HALMAN, SAM ARMSTRONG, ALEX CARBAJAL, ROGER FARRINGTON, CURTIS
HUFF, AND TITO BETANCUR v. AMERICAN ENERGY SERVICES, NIEWOEHNER PARTNERSHIP, L.P.,
RCH/HSJ/CCM/MCPI, L.P., AUTRY STEPHENS, JOHN CARNETT, BRACK BLACKWOOD, AND DENNIE
MARTIN; from Midland County; 11th district (11-06-00118-CV, 224 SW3d 544, 05-10-07)
The Court reverses the court of appeals' judgment and remands the case to the trial court.
Justice Green delivered the opinion of the Court. [pdf]
SIGNATURE NOT NECESSARILY REQUIRED TO FORM VALID ARB AGREEMENT
The FAA contains no requirements for the form or specificity of arbitration agreements except that they be
in writing; it does not even require that they be signed. See 9 U.S.C. § 2; Seawright v. Am. Gen. Fin. Servs.,
Inc., 507 F.3d 967,978 (6th Cir. 2007) (citing cases from the 2nd, 5th, 7th, and 10th Circuits). But in this
defendant’s affidavit establishes that the Acknowledgment was signed “For the Company” by an
assistant manager at the Macy’s store where Tomsic worked. In Re Macy's Texas, Inc., No. 08-0584 (Tex.
Jun. 26, 2009)(per curiam)(arbitration under FAA compelled by mandamus in dispute over injuries
sustained at the work place)(correct identification of employer was an issue, but did not defeat duty to
arbitrate)(employee must arbitrate on-the-job injuries claim against company)
IN RE MACY'S TEXAS, INC.; from Bexar County; 4th district (04-08-00469-CV, ___ SW3d ___, [per curiam
opinion of the San Antonio Court of Appeals denying mandamus relief] 07-23-08)
stay order issued October 10, 2008, lifted
Pursuant to Texas Rule of Appellate Procedure 52.8(c), without hearing oral argument, the Court
conditionally grants the petition for writ of mandamus.
Per Curiam Opinion [pdf]
PARTY SIGNING IS PRESUMED TO HAVE READ THE CONTRACT
A party who signs an agreement is presumed to know its contents. In re Bank One, N.A., 216 S.W.3d 825,
826 (Tex. 2007). That includes documents specifically incorporated by reference. See id. Based on the
foregoing, we agree that the affidavit is no evidence that the forum-selection clause in the Restructuring
Agreement was secured by misrepresentation or fraud. In re Lyon Financial Services, Inc., No. 07-0486,
257 S.W.3d 228 (Tex. June 20, 2008)(per curiam) (orig. proc.) (mandamus, forum selection clause, motion
to dismiss improperly denied)
parties to a contract have an obligation to protect themselves by reading what they sign and, absent a
showing of fraud, cannot excuse themselves from the consequences of failing to meet that obligation. In re
Prudential, 148 S.W.3d at 134. Hernandez’s statements do not evidence overreaching or trickery by Lyon.
They show a transaction where Lyon offered to do business on a specified basis and MNI accepted.
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