This chapter discusses the first major requirement for a valid contract: that the parties have reached “mutual assent” on the basic terms of the deal. Here are a few of the key principles covered in this chapter:
Mutual assent: For a contract to be formed, the parties must reach “mutual assent.” That is, they must both intend to contract, and they must agree on at least the main terms of their deal.
Objective theory of contracts: In determining whether the parties have reached mutual assent, what matters is not what each party subjectively intended. Instead, a party's intentions are measured by what a reasonable person in the position of the other party would have thought the first party intended, based on the first party's actions and statements. This principle is known as the “objective theory of contracts.”