Forming a Contract – Say the Same Thing!

For a contract to form, there must be a valid offer and acceptance.  However, under Florida law, to validly accept an offer and form a contract, the parties must have “said the same thing” in mutually assenting to the offer’s precise terms.  Stated differently, by the accepting party, there must be a consistent regurgitation of the exact terms of the offer; or a positive and unqualified assent to the precise terms of the Plaintiff’s settlement offer; or an agreement to the precise promise requested by the Plaintiff.  Thus, a making of a contract requires the meeting of two sets of external signs of two parties having said the same thing without modification.  

Specifically, “[t]he law of contracts is applied to resolve issues regarding the formation of a binding settlement agreement.”  Knowling v. Manavoglu, 73 So. 3d 301, 303 (Fla. 5th DCA 2011).  “To be binding, mutual assent as to all essential terms is required.”  Id.  “Mutual assent does not mean that two minds must agree on one intention; rather, the formation of a contract depends on the parties having said the same thing, not on their having meant the same thing.”  Id.  

More specifically, “]b]asic contract law has long established that “[i]n order to create a contract, it is essential that there should be a ‘reciprocal assent’ to the contract terms.” Suarez Trucking FL Corp. v. Souders, 350 So. 3d 38, 42 (Fla. 2022) (quoting Strong & Trowbridge Co. v. H. Baars & Co., 60 Fla. 253, 54 So. 92, 93 (1910)). The “assent must be precisely [to] the same thing.” Id. “That is, the acceptance must mirror the offer.”  Id.  “Consequently, if one assents to a certain thing and the other assents to it only with modifications . . . no agreement or contract arises therefrom.” Id.  (emphasis added).  As the Florida Supreme Court stated in Suarez:  

We have said that “in determining whether there has been a mutual consent to a contract,” [t]he rule is probably best expressed by the late Justice Holmes in “The Path of the Law,” 10 Harvard Law Review 457, where it was stated in part that “The making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs—not on the parties having meant the same thing but on their having said the same thing.”

Id. (quoting Gendzier v. Bielecki, 97 So. 2d 604, 608 (Fla. 1957)) (emphasis added). 

Accordingly, for a contract to form, “[t]here must therefore be an objective manifestation by both parties of assent to the same terms.”  Id.  “This is a rule of consistency” and “[i]t is not . . . a rule of regurgitation.”  Id. at 42-43 (emphasis added).   That is because the “general rule at common law” is simply “that [an] acceptance must comply with [the] terms of [the] offer.”  Id. at 43 (emphasis added).  This “does not necessarily mean that the precise words of the requested promise must be repeated, but rather that, by a positive and unqualified assent to the proposal, the offeree must in effect agree to make precisely the promise requested.” Id. (quoting 2 Lord, Williston on Contracts § 6:11 (4th ed. 2007)). 

Practical Application – The takeaway from this blog is that when a party is entering into a contract or settling a matter, to accept, they must be cognizant of all terms of the offer—both monetary and non-monetary.  Meaning, when accepting, for a contract or settlement to form, an accepting party’s acceptance must mirror all terms of the offer as written. There must be no changes to the terms and if a party does not accept all the precise terms of an offer, no contract or settlement is formed.  Thus, it is incumbent upon an accepting to party to always be cognizant of all terms of an offer when accepting the same and to mirror those terms in its acceptance for a contract or settlement to form.