law-contract-formation | meeting of the minds on specific terms and conditions | definiteness of agreed-upon
contractual terms | restrictive indorsement on check | ratification by conduct, acceptance of benefits
|
defenses to breach of contract claims |

CONTRACT FORMATION - ELEMENTS OF A VALID CONTRACT

Parties form a binding contract when there is "(1) an offer, (2) acceptance in strict compliance with the terms of
the offer, (3) a meeting of the 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." Roman, 193 S.W.3d at 50 (citing Wal-Mart, Stores, Inc. v.
Lopez, 93 S.W.3d 548, 555-56 (Tex.App.-Houston [14th Dist.] 2002, no pet.)). "Consideration is also a
fundamental element of every valid contract." Id. (citing Turner-Bass Assocs. of Tyler v. Williamson, 932 S.W.2d
219, 222 (Tex. App.-Tyler 1996, writ denied)).

The elements of written and oral contracts are the same and must be present for a contract to be binding.  Wal-
Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555 (Tex. App.—Houston [14th Dist.] 2002, no pet.).  A binding
contract must have an offer and an acceptance; the acceptance must be in strict compliance with the terms of
the offer.  Advantage Physical Therapy, Inc. v. Cruse, 165 S.W.3d 21, 25 (Tex. App.—Houston [14th Dist.] 2005,
no pet.).  Generally, acceptance of an offer must be communicated to the offeror for a contract to be binding.  Id.
at 26.  Thus, silence does not ordinarily indicate acceptance of an offer.  See id. (citing Restatement (Second) of
Contracts § 69(1) cmt. a (1981)); see also Tex. Ass’n of Counties County Gov’t Risk Mgmt. Pool v. Matagorda
County, 52 S.W.3d 128, 132 (Tex. 2000) (noting that “as a general rule, ‘silence and inaction will not be
construed as an assent to an offer’” (quoting 2 Williston on Contracts § 6:49 (4th ed. 1991))).  

Among other elements, a party must prove offer and acceptance to demonstrate existence of a valid contract.
DeClaire v. G & B Mcintosh Family Ltd. P'ship, 260 S.W.3d 34, 44 (Tex. App.-Houston [1st Dist.] 2008, no pet.);
Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555-56 (Tex. App.-Houston [14th Dist.] 2002, no pet.). A "meeting
of the minds" is "merely a mutuality subpart of the offer and acceptance elements." Domingo v. Mitchell, 257 S.W.
3d 34, 40 (Tex. App.-Amarillo 2008, pet. denied). Although whether the parties intended to be bound is often a
question of fact, it may be determined as a matter of law. See Foreca, S.A. v. GRD Devel. Co., 758 S.W.2d 744,
746 (Tex. 1988); John Wood Group USA, Inc. v. ICO, Inc., 26 S.W.3d 12, 16 (Tex. App.-Houston [1st Dist.] 2000,
pet. denied); see also COC Servs., Ltd. v. CompUSA, Inc., 150 S.W.3d 654, 662-70 (Tex. App.-Dallas 2004, pet.
denied).

By signing a contract, a party is presumed to have read and understood its contents. See In re Prudential Co. of
Am., 148 S.W.3d 124, 134 (Tex.2004).

Cantella & Co., Inc. v. Goodwin, 924 S.W.2d  943, 944 (Tex. 1996) (Texas law presumes a party who signs a
contract has read it and knows of its contents)

CONTRACT FORMATION | ESSENTIAL TERMS MISSING

Parties form a binding contract when the following elements are present: (1) an offer, (2) an acceptance
in strict compliance with the terms of the offer, (3) meeting of the 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.  Id.  To
be enforceable, a contract must be
sufficiently certain to enable a court to determine the rights and
responsibilities of the parties.  Id. (citing T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218,
221 (Tex.1992)).  The
material terms of a contract must be agreed upon before a court can enforce the
contract.  See T.O. Stanley Boot, 847 S.W.2d at 221 (holding that
interest rate is material term in
context of contract to loan money).
Barajas v. Harvest Credit Management VI-B, LLC (Tex.App.- Houston [14th
Dist.] Aug. 28, 2008)(Guzman) (
credit card debt suit, summary judgment for debt collector reversed, contract
terms not proven) REVERSED AND REMANDED: Opinion by Justice Guzman  
Before Justices Frost, Seymore and Guzman
14-07-00048-CV  Celia Barajas v. Harvest Credit Management, VI-B, LLC as
assignee of Metris Direct Merchants Bank, Appeal from County Civil Court at Law No 3 of Harris County; Trial Court
Judge: Linda
Storey              


WTG Gas Processing, LP v. ConocoPhillips Company (pdf) (Tex.App.- Houston [14th Dist.] Mar. 2, 2010)
(Corrected superseding opinion by Seymore) (cross appeals,
breach of contract and tortious-interference claims,
no contract formed, statute of frauds, summary judgment affirmed)
AFFIRMED: Opinion by
Justice Charles Seymore     
Before Chief Justice Hedges, Justices Anderson and Seymore   
14-08-00019-CV WTG Gas Processing, LP v. ConocoPhillips Company, Targa Field Services, LLC, Targa
Resources Texas GP LLC, Targa Resouces, Inc., Targa Texas Field Services, Lp and Warburg Pincus, LLC    
Appeal from 333rd District Court of Harris County  
Trial Court Judge:
Joseph J. Halbach   

NO VALID AGREEMENT TO MEDIATE ON SPECIFIC TERMS WAS FORMED - NO BREACH   
The elements of written and oral contracts are the same and must be present for a contract to be binding.  Wal-
Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555 (Tex. App.—Houston [14th Dist.] 2002, no pet.).  A binding
contract must have an offer and an acceptance; the acceptance must be in strict compliance with the terms of
the offer.  Advantage Physical Therapy, Inc. v. Cruse, 165 S.W.3d 21, 25 (Tex. App.—Houston [14th Dist.] 2005,
no pet.).  Generally, acceptance of an offer must be communicated to the offeror for a contract to be binding.  Id.
at 26.  Thus, silence does not ordinarily indicate acceptance of an offer.  See id. (citing Restatement (Second) of
Contracts § 69(1) cmt. a (1981)); see also Tex. Ass’n of Counties County Gov’t Risk Mgmt. Pool v. Matagorda
County, 52 S.W.3d 128, 132 (Tex. 2000) (noting that “as a general rule, ‘silence and inaction will not be
construed as an assent to an offer’” (quoting 2 Williston on Contracts § 6:49 (4th ed. 1991))).  
The Levin Law Group, PC v. Sigmon (Tex.App.- Houston [14th Dist.] Jan. 21, 2010)(Sullivan)
(
no breach of agreement to mediate on specific terms that were not agreed to, silence not assent, no meeting of
the minds on cancellation fee, unforceable contract not formed)
Appellant, the Levin Law Group, P.C. (“LLG”) filed suit against attorney Ernesto de Andre Sigmon for breach of an agreement to
mediate an underlying civil lawsuit.  The trial court granted Sigmon’s motion for summary judgment after Sigmon asserted, inter
alia, (a) he did not accept the terms of the agreement, (b) he did not reschedule or cancel the mediation, and (c) the statute of
frauds operated to bar the alleged oral contract.  We affirm the judgment....
Under these circumstances, we conclude that Sigmon conclusively established that he did not accept the terms of the mediation
specified in the letters faxed by LLG, the mediation rules form, or the mediation agreement form—an essential element of LLG’s
breach of contract claim.  Cf. IHS Cedars Treatment Ctr. of Desoto, Tex., Inc., 143 S.W.3d at 798; see Advantage Physical Therapy,
Inc., 165 S.W.3d at 25–26.  Because LLG presented no evidence raising a genuine issue of material fact regarding this issue, the
trial court properly granted summary judgment to Sigmon.  
AFFIRMED: Opinion by Justice Kent Sullivan     
Before    
14-08-01165-CV   The Levin Law Group, P.C. v. Ernesto De Andre Sigmon    
Appeal from Co Civil Ct at Law No 4 of Harris County
Trial Court Judge:  
Roberta Anne Lloyd

Parties create a binding agreement when the following elements are present: (1) an offer, (2) an acceptance in
strict compliance with the terms of the officer, (3) a meeting of the 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
Winchek v. Am.
Exp. Travel Related Servs. Co., Inc., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.); Prime
Prods., Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet. denied).  “[T]o
be legally binding, a contract must be sufficiently definite in its terms so that a court can understand what the
promisor undertook.”  T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992).  

To determine whether a contract is enforceable as written, we construe it as a matter of law and focus on
ascertaining the intent of the parties as expressed in the instrument.  Chapman v. Abbot, 251 S.W.3d 612, 616
(Tex. App.—Houston [1st Dist.] 2007, no pet.); see also Gilbert v. Pettiette, 838 S.W.2d 890, 893 (Tex. App.—
Houston [1st Dist.] 1992, no writ) (observing that whether offer and acceptance have occurred is usually question
of law).  

Farragut Financial, et al. v. Capital One Auto (Tex.App.- Houston [1st Dist.] Sep. 25, 2008)(Bland)
(auto financing,
no contract formation, no meeting of the minds on terms, missing essential terms)
AFFIRM TC JUDGMENT: Opinion by
Justice Bland  
The movant is entitled to summary judgment if it conclusively establishes that no contract exists.  S & A Marinas,
Inc. v. Leonard Marine Corp., 875 S.W.2d 766, 768 (Tex. App.—Austin 1994, writ denied).  

As authority for its assertion that Capital One’s indorsement of the checks formed a contract, Farragut cites City
of Houston v. First City, 827 S.W.2d 462 (Tex. App.—Houston [1st Dist] 1992, writ denied).  In that case, the
taxpayer sent checks in payment of delinquent property taxes and specified on the check stubs and a letter
accompanying them instructing the City to apply the payments only to tax, interest and certain penalties and
withhold payments under categories that were in dispute.[1]   Id. at 468, 472.  We held that the City tacitly agreed
to the conditions stated on the checks, along with the accompanying transmittal letters, when it accepted the
payments, thereby creating an implied contract.  Id. at 473.  

Farragut Financial, et al. v. Capital One Auto (Tex.App.- Houston [1st Dist.] Sep. 25, 2008)(Bland)
(auto financing,
no contract formation, no meeting of the minds on terms, missing essential terms)
AFFIRM TC JUDGMENT: Opinion by
Justice Bland  
Before Justices Taft, Jennings and Bland
01-07-00497-CV Farragut Financial, et al v. Capital One Auto, et al
Appeal from County Civil Court at Law No 1 of Harris County
Trial Court
Judge: Hon. Jack Cagle  

We find City of Houston inapposite.  In City of Houston, we noted that the checks were tendered in the context of
an existing dispute between the City and First City concerning First City’s tax obligations, and that the check
stubs and transmittal letters contained clear conditions addressing the application of the payments to certain
categories and not others.  Id. at 472.  Here, Farragut did not send the checks in the context of a transaction
between Farragut and Capital One, but rather, solely for the benefit of its borrower, Daniel, to satisfy Daniel’s
obligations arising out of Daniel’s loan agreement with Capital One.  

We also observe that the indorsement language fails to recite any independent consideration from Farragut to
Capital One which could support the imposition of any obligation on Capital One.  Nor does it impose any clear
condition on Capital One; rather, it states that, on full payment of Daniel’s loan, Capital One is to forward to a
nonexistent and unidentified “undersigned” a motor vehicle title.[2]  Further, the undisputed facts also show that
Farragut’s checks did not constitute full payment on Daniel’s balance due; thus, they did not satisfy the condition
precedent to any duty that Farragut sought to impose.  We hold that the stamped language on Farragut’s checks
is too incomplete and indefinite to enforce an obligation that Farragut supposedly intended Capital One to
undertake.[3]  See T.O. Stanley Boot Co., 847 S.W.2d at 221.

Sometimes, a single document that does not form a contract can be definite enough to enforce when read with
related documents.  “When two instruments involve the same parties and relate to the same transaction, we read
the documents together in order to ascertain the parties’ intent.”  Bowers v. Taylor, No. 01-05-00667-CV, 2007
WL 1299440, at *4  (Tex. App.—Houston [1st Dist.] May 3, 2007, no pet.)  (citing Fort Worth Indep. Sch. Dist. v.
City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000)).  Farragut contends that the indorsement language on the
checks should be read in tandem with the authorization for payment letters accompanying the checks to form a
contract.  

We disagree.  

Courts consider multiple documents together in ascertaining the parties’ intent only if those documents involve
the same parties and transaction.  See Bowers, 2007 WL 1299440 at *4.  The letters accompanying Farragut’s
checks contain instructions from Daniel that authorize Capital One to accept the checks as payment in
connection with the loan agreement, referenced by its account number, between Capital One and Daniel.  
Farragut contends that we should construe the letters as involving the same parties, pointing out that the letters
were prepared on Farragut letterhead and state that they are “From: Farragut Financial Corporation.”  The fact
that the letters were prepared on Farragut’s printed letterhead, however, does not compel us to view Farragut as
their author.  If the typewritten provisions of a contract conflict with its printed provisions, the court interpreting it
must give the typewritten provisions effect over the printed provisions.  McCreary v. Bay Area Bank & Trust, 68 S.
W.3d 727, 732 (Tex. App.—Houston [14th Dist.] 2001, pet. dism’d).  The typewritten language in the letters
refers to the author as “I” and closes with a line for Daniel’s signature.  The bulk of the typewritten provisions
indicate that Daniel is the intended author of the letters.  Daniel possessed the authority to authorize and instruct
Capital One concerning his loan payment and any release of information about his agreement with Capital One.  
That additional reason reasonably dictates that Daniel is the author of the letters.  

Furthermore, the letters do not involve the same transaction as the agreement alleged by Farragut.  Farragut’s
allegation that Capital One failed to comply with a duty to forward the motor vehicle title directly to Farragut
contemplates a different transaction, one that involves different parties and obligations than the loan agreement
between Daniel and Capital One or between Daniel and Farragut.  Consequently, the authorization for payment
letters do not supply any missing terms for an agreement between Farragut and Capital One.  

Because the language on the checks omits terms material to contract formation and fails to state any definite
obligation, Farragut and Capital One could not have reached a meeting of the minds as a matter of law.   
Accordingly, because the evidence conclusively negates the existence of any contract between Farragut and
Capital One involving delivery of the motor vehicle title at issue, we hold that the trial court properly granted
summary judgment in favor of Capital One.

CONTRACT FORMATION BY RATIFICATION OF PRIOR CONTRACT, ACCEPTANCE OF BENEFITS UNDER IT  
Texoma Advertising Co., LP v. The Siblings, LLC (Tex.App.- Houston [14th Dist.] Jun. 16, 2009)(Yates)
(lease agreement for advertising disputed,
actual or constructive knowledge, statute of frauds conveyance of
interest in real estate,
ratification of disputed contract, acceptance of benefits under it with knowledge of its terms)

Agreement to Arbitrate - Acceptance and Formation of Contract by Conduct - Continued Employment
The 2001 DRP provided, “Employment or continued employment after the Effective Date of this Plan constitutes
consent by both the Employee and the Company to be bound by this Plan, both during the employment and after
termination of employment.” The 2001 DRP defines the “effective date” as June 15, 1998, as amended as of
August 15, 1999. O’Beirne does not dispute that he was employed by Halliburton after the effective date of the
plan. Therefore, O’Beirne accepted the agreement by performance, i.e., his employment.      
Accordingly, we hold that a valid agreement to arbitrate exists between Halliburton and O’Beirne.
In re Halliburton Co. (Tex.App.- Houston [1st Dist.] Jul. 2, 2009)(Sharp) (arbitration mandamus)
(
FAA: trial court should have granted motion to compel arbitration in employment dispute)     
GRANT PETITION FOR WRIT OF MANDAMUS: Opinion by
Justice Sharp     
Before Chief Justice Radack, Justices Taft and Sharp   
01-09-00150-CV In re Halliburton Company   
Appeal from 133rd District Court of Harris County
Trial Court Judge:
Jaclanel M. McFarland   

Acceptance by act other than signature
Here, the DeClaire Note was signed by DeClaire and dated September 16, 2004. The DeClaire Note contains all
the terms of a valid contract in that it provides that DeClaire promises to pay the Partnership $216,260.00 on
March 6, 2005. Although McIntosh did not sign the Note, a contract can still be effective if signed by only one
party. See, e.g., Velasquez v. Schuehle, 562 S.W.2d 1, 3 (Tex.Civ.App.-San Antonio 1977, no writ). Specifically,
if one party signs, the other may accept by his acts, conduct, or acquiescence in the terms of the contract. Id.;
see In re Bunzl USA Inc., 155 S.W.3d 202, 209 (Tex. App.-El Paso 2004, orig. proceeding); ABB Kraftwerke
Aktiengesellschaft v. Brownsville Barge & Crane, Inc., 115 S.W.3d 287, 292 (Tex.App.-Corpus Christi 2003, pet.
denied); Augusta Dev. Co. v. Fish Oil Well Servicing Co., 761 S.W.2d 538, 545 (Tex.App.-Corpus Christi 1988,
no pet.); see also In re Citgo Petroleum Corp., No. 09-07-563-CV, 2007 WL 4938701, at *2 (Tex.App.-Beaumont
Feb. 21, 2008, mand. filed) (although party's signature on contract is strong evidence that party unconditionally
assented to its terms, when signature is not present other evidence may be relied on to prove party's
unconditional assent); cf. Baylor University v. Sonnichsen, 221 S.W.3d 632, 635 (Tex.2007) (coach and private
university did not mutually assent to one-year employment contract when university prepared and signed draft
employment contract but did not deliver it to coach).
DeClaire v. G&B McIntosh Family LP
DeClaire v. G & B MCINTOSH FAMILY LTD., 260 SW 3d 34 01-06-00423-CV.- Tex: Court of Appeals, Houston
May 8, 2008
McIntosh picked up the Note on the day it was signed by DeClaire, September 15, 2004, and subsequently gave
it to his financial advisor. Neither McIntosh nor anyone else representing the interests of the Partnership objected
to the terms of the DeClaire Note. After taking possession of 45 the note, McIntosh submitted a letter directing
Bank One to transfer the funds from the Partnership's account to pay off DeClaire's Bank One Note. See Cox v.
Southern Garrett, 245 S.W.3d 574, 581 (Tex.App.-Houston [1st Dist.] 2007, no pet.) (holding that act of
depositing check was acceptance of offer). By taking possession of the Note, acting on it, and not objecting to
any part of it, McIntosh accepted its terms on behalf of the Partnership. See Anderson, 115 S.W.2d at 610. Thus,
we conclude that the parties entered into a valid written contract.

AKIB Construction, Inc. v. Neff Rental, Inc. (Tex.App.- Houston [14th Dist.] Apr. 3, 2008)(Hedges)
(
sworn account, breach of contract, breach of lease claim not a sworn account, quantum meruit)
REVERSED AND REMANDED: Opinion by
Chief Justice Hedges
14-07-00063-CV AKIB Construction, Inc. v. Neff Rental, Inc.
Appeal from County Civil Court at Law No 3 of Harris County
Trial Court Judge:  Ed Landry
We next turn to the breach of contract theory of recovery. To be entitled to summary judgment on a breach of
contract claim, a plaintiff must conclusively demonstrate (1) the existence of a valid contract; (2) performance or
tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained
as a result of the breach. E.g., Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex.
App.-Houston [1st Dist.] 2007, no pet.). A valid and enforceable contract is formed by an offer, an acceptance, a
meeting of the minds, and an expression of the terms with sufficient certainty so that there is no doubt regarding
the parties' intentions. MG Bldg. Materials, Ltd. v. Moses Lopez Custom Homes, Inc., 179 S.W.3d 51, 61 (Tex.
App.-San Antonio 2005, pet. denied). While Texas courts favor validating transactions rather than voiding them,
the courts may not create a contract where none exists. Kelly v. Rio Grande Computerland Group, 128 S.W.3d
759, 766 (Tex. App.-El Paso 2004, no pet.). See generally Angelou v. African Overseas Union, 33 S.W.3d 269,
278-80 (Tex. App.-Houston [14th Dist.] 2000, no pet.) (discussing at length the requirements for contract
formation).
As proof of contract formation, Neff points to AKIB's signing of the credit application as well as the signature of
Bean representatives on the invoices listing AKIB as renter. On its face, however, the credit application does not
set any terms regarding the equipment rentals but merely seeks the extension of credit. Indeed, the document
does not even contain a promise by AKIB to pay or any promises whatsoever by Neff.[4] It is merely an
application to open a credit account. Although there is some suggestion in the evidence that Bean may have
been acting in a representative capacity for AKIB in signing the invoices, such evidence is inferential only and
does not establish agency as a matter of law.[5]
Furthermore, in both his deposition testimony attached to Neff's motion and his affidavit attached to AKIB's
response, Memom asserted that the contract for equipment rental was between Bean and Neff. He insists that
AKIB did not enter such a contract and did not order any equipment; rather, AKIB agreed (with Bean) only to
make payments for the rentals up to $14,000. Consequently,
a fact issue exists as to whether a contract was
ever formed between AKIB and Neff obligating AKIB to pay for all rentals requested. The trial court therefore
erred if it based the summary judgment on Neff's breach of contract theory of recovery.


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