P was employed by D as manager of the sample department. He had a one year contract running through December 15.
P asked D several times about renewing the contract prior to December 15 but had been put off.
On December 23, P asked D to renew his contract or he would quit. P testified that D said to get back to work, that everything was alright, and to get his men out without worry.
On February 15, D told P that his services were no longer needed.
P sued D for breach of contract.
Procedural History:
Lower court found for D.
MO Court of Appeals reversed, found for P, contract valid.
Issues:
Can an enforceable contract be formed without reference to the subjective intentions of either party?
Holding/Rule:
An enforceable contract can be formed without reference to the subjective intentions of either party.
If a man conducts himself such that a reasonable person would believe that he was assenting to the terms proposed by another party, and that other party upon that belief enters into the contract, that man would be equally bound whether or not he had actual subjective intent.
Reasoning:
The inner intention of parties to a conversation alleged to create a contract cannot either make a contract of what transpired, or prevent one for arising, if the words used were sufficient to constitute a contract.
The intention in contracts is embodied in the words which the parties used, in both written in oral contracts.
Though D may not have intended to employ P by what transpired between them, if what D said could be taken by a reasonable man to be a contract, and P understood it that way, then it was a valid contract.
