Contract Formation in Texas

What Is Contract Formation?

Background

"Ordinarily, to be legally enforceable, a contract must be factually supported by an offer, an acceptance, consideration, and mutual assent." (See Hartbarger v. Frank Paxton Co. (1993) 857 P.2d 776, 780.)

"Mutual assent is based on objective evidence, not the private, undisclosed thoughts of the parties. In other words, what is operative is the objective manifestations of mutual assent by the parties, not their secret intentions." (See MRC Permian Co. v. Three Rivers Operating Co., No. 05-14-00353-CV, at *13 (Tex. App. Aug. 5, 2015).)

"The rule is that an offer becomes a binding promise and results in a contract only when it is accepted." (See Orcutt v. S & L Paint Contractors, Ltd. (1990) 791 P.2d 71, 73; McCoy v. Alsup (1980) 609 P.2d 337, 341.)

“A proposal by an offeror is not effective, and is not an offer, until it is made known to the other party, who is then in the position to accept or reject it.” (See Foster v. Udall (1964) 335 F.2d 828, 831.)

“In the formation of a contract, the offeror is entitled to know in clear terms whether the offeree accepts the proposal.” (See Ross v. Ringsby (1980) 614 P.2d 26, 29.)

"Acceptance of an agreement is essential for the agreement to be binding." (See DeArmond v. Halliburton Energy Servs., Inc. (2003) 81 P.3d 573, 578.)

"The acceptance must be clear, positive, and unambiguous in order to result in a binding contract.” (See See Tatsch v. Hamilton-Erickson Mfg. Co. (1966) 418 P.2d 187, 189.)

“In addition, for an offer and acceptance to create a binding contract, there must be an objective manifestation of mutual assent by the parties to the material terms of the contract.” (See Alcantar v. Sanchez (2011) 257 P.3d 966, 973.)

"Any expression of assent that changes the terms of the offer in any material respect may be operative as a counter-offer; but it is not an acceptance and consummates no contract." (See MRC Permian Co. v. Three Rivers Operating Co., No. 05-14-00353-CV, at *13-14 (Tex. App. Aug. 5, 2015).)

General Information for Complaints and Motions

“Under Texas contract law, a legally enforceable contract consists of (1) an offer, (2) an acceptance, (3) a meeting of minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding.” (See Prime Prods., Inc. v. S.S.I. Plastics, Inc. (2002) 97 S.W.3d 631, 636; Forged Components, Inc. v. Guzman (2013) 409 S.W.3d 91, 100.)

“Unless otherwise indicated, an offer may be accepted in any manner reasonable under the circumstances.” (See MHorton v. DaimlerChrysler Fin. Servs. Ams., L.L.C. (2008) 262 S.W.3d 1, 6.)

“The mode of expressing assent is inconsequential as long as it effectively makes known to the offeror that his offer has been accepted.” (See Forged Components, Inc. v. Guzman (2013) 409 S.W.3d 91, 100-01.)

“A party may show acceptance through conduct.” (See id.)

Standard of Review and Burdens of Proof

“We review a summary judgment de novo.” (See Harkins v. Wal-Mart Stores Tex., LLC, No. 02-21-00201-CV, at *9 (Tex. App. June 23, 2022).)

“The movant for summary judgment has the burden of showing there is no genuine issue of material fact and it is entitled to judgment as a matter of law.” (See Nixon v. Mr. Property Management Co. (1985) 690 S.W.2d 546, 548; Powell v. Foxall (2001) 65 S.W.3d 756, 758.)

“In deciding whether a disputed material fact issue precludes summary judgment, evidence favorable to the non-movant is taken as true.” (See id.)

“Every reasonable inference in favor of the non-movant is indulged and any doubts are resolved in its favor.” (See id.)

“The movant must either disprove at least one element of each of plaintiff's theories of recovery or conclusively establish each essential element of an affirmative defense.” (See City of Houston v. Clear Creek Basin Auth. (1979) 589 S.W.2d 671, 678; Powell v. Foxall (2001) 65 S.W.3d 756, 758.)

“If the movant conclusively proves all essential elements of his defense, the burden shifts to the non-movant.” (See Powell v. Foxall (2001) 65 S.W.3d 756, 758.)

“The non-movant must answer that affirmative defense for summary judgment purposes.” (See id.)

The Court’s Decisions

It is well settled that “in an option contract, with the requirement of its exercise in writing, the rule is that its terms must be fully and completely accepted in all its parts, and its provisions strictly complied with, before it becomes an executory contract." (See MRC Permian Co. v. Three Rivers Operating Co., No. 05-14-00353-CV, at *15 (Tex. App. Aug. 5, 2015).)

“Another well-established principle of contract law is that the offeror controls the offer and the terms of acceptance. An acceptance is not valid, and does not create a contract, if it fails to comply with the place, time or manner of acceptance specified in the offer.” (See MRC Permian Co. v. Three Rivers Operating Co., No. 05-14-00353-CV, at *15 (Tex. App. Aug. 5, 2015).)

Documents for Contract Formation in Texas

Sort By

NOTZON ADVISORS LIMITED vs. RIO GRANDE E&P MANAGEMENT LLC FRAUD document preview

Rio Grande's Traditional and No-Evidence MSJ

57 pages

CAUSE NO. 2022-23621 NOTZON ADVISORS LIMITED and § TALCO PARTNERS II, LLC, § § Plaintiffs, § § v. § HARRIS COUNTY, TEXAS § RIO GRANDE E&P MANAGEMENT, LLC § and RIO GRANDE E&P, LLC, § § 334TH JUDICIAL DISTRICT …

Case Name NOTZON ADVISORS LIMITED vs. RIO GRANDE E&P MANAGEMENT LLC