In our last blog post about contract law, we wrote about damages from contract breaches in Kansas, introducing the concept of foreseeability as a limiting factor in determining damages for a breach of contract. Prior thereto, we similarly wrote about breaches of contract in Kansas, discussing the five elements of a Kansas breach of contract claim. This current post is the latest in our contract law series, returning us to fundamentals that form the bedrock of enforceable agreements both large and small.
The Supreme Court of Kansas stated ten years ago that “it is a fundamental principle of contract law that there must be a meeting of the minds regarding essential terms in order to have a binding contract.” State v. Copes, 290 Kan. 209, 217, 224 P.3d 571, 577 (Kan. 2010) (citing Mohr v. State Bank of Stanley, 244 Kan. 555, 572, 770 P.2d 466 (1989)). Two years later, this principle was affirmed: “In order to form a binding contract, there must be a meeting of the minds on all the essential elements.” Unified School Dist. No. 446 v. Sandoval, 295 Kan. 278, 282, 286 P.3d 542, 546 (Kan. 2012) (citing Albers v. Nelson, 248 Kan. 575, 580, 809 P.2d 1194 (1991)).
What exactly is a meeting of the minds? It might seem to imply an attempt to get inside the heads of the contracting parties in an effort to determine their hidden, unspoken, or subjective intentions, but the term really does not mean that. A “meeting of the minds” actually refers to objective intentions: what one party manifests, expresses, or communicates to the other.
A better term for “meeting of the minds”, in this author’s opinion, is “mutual assent”. The Kansas Supreme Court does not go so far as to confirm this sentiment, but it does, in Sandoval, equate the two terms. See id. at 550-51 (quoting the Restatement (Second) of Contracts for the proposition that “the formation of a contract requires…a manifestation of mutual assent” and explaining the term “meeting of the minds” as an event that occurs when “[e]ach party… accept[s] the essential terms of the contract and outwardly communicate[s] the acceptance in a way reasonably intended to be understood as such[.]”).
The Kansas Court of Appeals back in 2004 (while not being critical of the term itself) did a nice job of dispelling the “myth” of “meeting of the minds”. After stating that a meeting of the minds between the two parties must have occurred as to all essential terms in order to find that the parties entered into an enforceable contract, the court went on to demystify what it meant by the term “meeting of the minds”: “In determining intent to form a contract, the test is objective, rather than subjective, meaning that the relevant inquiry is the ‘manifestation of a party’s intention, rather than the actual or real intention.’” Sw. & Assocs., Inc. v. Steven Enter., 32 Kan. App. 2d 778, 781, 88 P.3d 1246, 1249 (Kan. Ct. App. 2004) (quoting 17A Am. Jur. 2d, Contracts § 27).
The Kansas Court of Appeals added one more comment to its already helpful clarification: “‘the inquiry will focus not on the question of whether the subjective minds of the parties have met, but on whether their outward expression of assent is sufficient to form a contract.’” Id. (quoting 1 Lord, Williston on Contracts § 4:1, p. 241 (1990)).
As stated hereinabove, per the highest court of this state of Kansas, a fundamental principle of contract law is that there must be a meeting of the minds in order to have a binding contract. To understand fundamental principles, sometimes, one has to dig a little deeper. This blog post shows what lies beneath the legal topsoil in Kansas, bringing clarity to one of the lesser-understood fundamental principles of contract law.
Here at Kincaid Business & Entrepreneurial Law, LLC ®, we have substantial experience working with contracts. We frequently review, revise, and draft contracts for small businesses, landlords, employers, entrepreneurs, and others. We also have the competency to determine whether a breach of contract has occurred and represent a party in the enforcement or defense thereof. Please contact us at 913-735-7707 or conveniently schedule with us here if we might be of service to you or your business.
Matthew T. Kincaid