To create a valid contract, three general requirements must be met.
Mnemonic: Mother Adores Cigars After Dinner
1. Mutual Assent
3. Absence of Defenses
This chapter primarily deals with mutual assent, also called a “meeting of the minds.” It embodies the idea that all parties should have a similar understanding of the contract they agree to enter. To achieve mutual assent, the parties often undergo a negotiated process whereby each makes proposals and counterproposals until they arrive at a mutually acceptable arrangement. The process ends when one side accepts the other side’s offer (proposal).
An offer is a manifestation of willingness to enter into a bargain that invites another person’s assent. So the bargain with assent will, in turn, conclude the arrangement (Rest. 2d. § 24). One who makes an offer is the offeror, and the person to whom it is made is the offeree. To be a valid offer (i.e., to constitute an offer), a manifestation of intent to enter a bargain must have “the 3 C’s:”
Commitment or promise by the offeror to enter into a contract Certainty and definitiveness of essential terms Communication by offeror to offeree