Agreement in the United States

Agreement Definition

(from Lat. aggregatio mentium). A coming together of parties in opinion or determination; the union of two or more minds in a thing done or to be done; a mutual assent to do a thing. … The consent of two or more persons concurring, the one in parting with the other, in receiving, some property, right, or benefit. … A mutual contract in consideration between two or more parties. …Agreement is seldom applied to specialties; contract is generally confined to simple contracts ; and promise refers to the engagement of a party without reference to the reasons or considerations for it, or the duties of other parties. … An agreement ceases to be such by being put in writing under seal, but not when put in writing for a memorandum. … A promise or undertaking. This is a loose and inaccurate use of the word. … The writing or instrument which is evidence of an agreement. This is a loose and evidently inaccurate use of the term. The agreement may be valid, and yet the written evidence thereof insufficient. Agreements are:
(1) Conditional, being those which are to have full effect only in case of the happening of certain events, or the existence of a given state of things.
(2) Absolute, being dependent on no contingency. They are also:
(3) Executed, being those where nothing further remains to be done by the parties, or
(4) Executory, being such as rest on articles, memorandums, parol promises or undertakings, and the like, to be performed in the future, or which are entered into preparatory to more solemn and formal alienations of property. Powell, Cont. An executed agreement always conveys a chose in possession, while an executory one conveys a chose in action only. They are also:
(5) Express, being those in which the terms are openly uttered and avowed by the parties at the time of making, or
(6) Implied, being those which the law supposes the parties to have made, although the terms were not openly expressed.

(This definition of Agreement is based on The Cyclopedic Law Dictionary ). See contract (in U.S. law). For a meaning of it, read Agreement in the Legal Dictionary here.

The Agreement: Offer and Acceptance

The core of a legal contract is the agreement between the parties. That is not merely a matter of convenience; it is at the heart of our received philosophical and psychological beliefs. As the great student of contract law, Samuel Williston, put it:

“It was a consequence of the emphasis laid on the ego and the individual will that the formation of a contract should seem impossible unless the wills of the parties concurred. Accordingly we find at the end of the eighteenth century, and the beginning of the nineteenth century, the prevalent idea that there must be a “meeting of the minds” (a new phrase) in order to form a contract.” (1921, p. 365)

Although agreements may take any form, including unspoken conduct between the parties (UCC Section 2-204(1)), they are usually structured in terms of an offer and an acceptance. Note, however, that not every agreement, in the broadest sense of the word, need consist of an offer and acceptance, and it is entirely possible, therefore, for two persons to reach agreement without forming a contract. For example, people may agree that the weather is pleasant or that it would be preferable to go out for Chinese food rather than seeing a foreign film; in neither case has a contract been formed. One of the major functions of the law of contracts is to sort out those agreements that are legally binding—those that are contracts—from those that are not.

In interpreting agreements, courts generally apply an objective standard. The Restatement (Second) of Contracts defines agreement as a “manifestation of mutual assent by two or more persons to one another.” (Section 3) The UCC defines agreement as “the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance.” (Section 1-201(3)) The critical question is what the parties said or did, not what they thought they said or did.

The distinction between objective and subjective standards crops up occasionally when one person claims he spoke in jest. The vice president of a manufacturer of punchboards, used in gambling, testified to the Washington State Game Commission that he would pay $100,000 to anyone who found a “crooked board.” Barnes, a bartender, who had purchased two that were crooked some time before, brought one to the company office, and demanded payment. The company refused, claiming that the statement was made in jest (the audience before the commission had laughed when the offer was made). The court disagreed, holding that it was reasonable to interpret the pledge of $100,000 as a means of promoting punchboards:

“(I)f the jest is not apparent and a reasonable hearer would believe that an offer was being made, then the speaker risks the formation of a contract which was not intended. It is the objective manifestations of the offeror that count and not secret, unexpressed intentions. If a party’s words or acts, judged by a reasonable standard, manifest an intention to agree in regard to the matter in question, that agreement is established, and it is immaterial what may be the real but unexpressed state of the party’s mind on the subject.Barnes v. Treece, 549 P.2d 1152 (Wash. App. 1976).

An offer (i.e. the proposal upon which the contract is based) is a manifestation of willingness to enter into a bargain such that it would be reasonable for another individual to conclude that assent to the offer would complete the bargain. Offers must be communicated and must be definite; that is, they must spell out terms to which the offeree can assent.

To constitute an agreement, there must be an acceptance of the offer. The offeree (i.e. a manifestation of the willingness to be bound by the terms of the offer) must manifest his assent to the terms of the offer in a manner invited or required by the offer. Complications arise when an offer is accepted indirectly through correspondence. Although offers and revocations of offers are not effective until received, an acceptance is deemed accepted when sent if the offeree accepts in the manner specified by the offeror.

If the offeror specifies no particular mode, then acceptance is effective when transmitted as long as the offeree uses a reasonable method of acceptance. It is implied that the offeree can use the same means used by the offeror or a means of communication customary to the industry. For example, the use of the postal service was so customary that acceptances are considered effective when mailed, regardless of the method used to transmit the offer. Indeed, the so-called “mailbox rule” (the acceptance is effective upon dispatch) has an ancient lineage, tracing back nearly two hundred years to the English courts.” Adams v. Lindsell, 1 Bamewall & Alderson 681 (K.B. 1818). (1)

Browse the Legal Encyclopedias of Law for Agreement

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Agreement Agreement in the World Legal Encyclopedia.
Agreement Agreement in the European Legal Encyclopedia.
Agreement Agreement in the Asian Legal Encyclopedia.
Agreement Agreement in the UK Legal Encyclopedia.
Agreement Agreement in the Australian Legal Encyclopedia.

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Concept of Mou in relation to Safe Place

Definition of Mou in this context: A memorandum of understanding, which is a signed formal agreement between two parties.

Finding the law: Agreements in the U.S. Code

A collection of general and permanent laws relating to agreements, passed by the United States Congress, are organized by subject matter arrangements in the United States Code (U.S.C.; this label examines agreements topics), to make them easy to use (usually, organized by legal areas into Titles, Chapters and Sections). The platform provides introductory material to the U.S. Code, and cross references to case law. View the U.S. Code’s table of contents here.


See Also

Further Reading (Articles)

Executive Agreements (Update), Encyclopedia of the American Constitution; January 1, 2000

Agreements Make the World Go Round – except When They Cause Disputes!, Mondaq Business Briefing; April 8, 2014; Hayford, Owen

Prenuptial Agreements, Gale Encyclopedia of Everyday Law; January 1, 2006

Voting Agreements Under Turkish Law., Mondaq Business Briefing; October 4, 2011

Brokerage Agreement under Turkish Law, Mondaq Business Briefing; January 30, 2013

Noncompete agreements: How to make them stick., Air Conditioning, Heating & Refrigeration News; July 19, 1999; Hyman, Caroline

Agreements made with part of a business – are they valid?(Pilbara Iron Company (Services) Pty Ltd agreement with employees), Mondaq Business Briefing; September 30, 2011

Agreements for Lease: Back to Basics, Mondaq Business Briefing; March 1, 2014

Entire Agreement Clauses: The Agreement, The Whole Agreement And Nothing But The Agreement?(AXA Sun Life Services plc case against Campbell Martin Ltd), Mondaq Business Briefing; March 9, 2012

Publishing Agreements: An Overview, Canadian Musician; July 1, 2006; Sanderson, Paul

Advance Pricing Agreements, Mondaq Business Briefing; May 7, 2014; Gandhi, Karan

Shareholders Agreements and Constitution: Consistency despite the Inconsistency Clause, Mondaq Business Briefing; March 24, 2014; Hoffman, Geoff

Non-Binding Agreements – David Frost V Wake Smith & Tofields Solicitors, Mondaq Business Briefing; July 4, 2013; Burnette, Andrew

Anti-Competitive Agreements: Tests and Tribulation, Mondaq Business Briefing; July 11, 2013; Dubey, Neeraj

Employee Agreements for Repayment of Training Costs: The Emerging Case Law, Labor Law Journal; October 1, 2008; Kraus, Anthony

International agreements: A primer for the deploying judge advocate, Air Force Law Review; January 1, 1997; Bredemeyer, Arthur C

Revisiting Non-Competition Agreements in New Hampshire: Recent Legal Developments Require Care and Precision, Mondaq Business Briefing; July 29, 2013; Shilling, Cameron



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