Home Table of Contents

AMI 2402 Issues—Contract Formation

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 2402
Arkansas Model Jury Instructions-Civil
December 2023 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 24. Contracts
Contract Formation
AMI 2402 Issues—Contract Formation
To establish [a] [an implied] contract, [plaintiff] has the burden of proving each of three essential propositions:
First, that [plaintiff] made an offer to enter into a contract that was accepted by [defendant];
Second, that there was an exchange of consideration; and
Third, that at the time the contract was made, its essential terms were reasonably certain and agreed to by both [plaintiff] and [defendant].
NOTE ON USE
Use the bracketed language “an implied” when a party alleges that his contract was implied.
If there is no dispute as to the existence of a contract between the parties, use AMI 2403.
COMMENT
The essential elements of a contract under Arkansas law include (1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement, and (5) mutual obligations. Daimler-Chrysler Corp. v. Smelser, 375 Ark. 216, 289 S.W.3d 466 (2008). “Whether or not there was a meeting of the minds is an issue of fact.” Id. at 219. However, certain elements of a valid contract—subject matter, legal consideration, mutuality of obligation—are matters of law for the court to decide. See Bene v. New York Life Ins. Co., 191 Ark. 714, 87 S.W.2d 979 (1935) (subject matter); Showmethemoney Check Cashiers v. Williams, 342 Ark. 112, 119–22, 27 S.W.3d 361, 365–67 (2000) (mutuality of obligation). Only those elements of a contract that generally present fact questions for the jury are set forth in this instruction.
The mutual agreement, i.e., the meeting of the minds, required to form a contract is judged objectively, not subjectively. See Williamson v. Sanofi Winthrop Pharms., Inc., 347 Ark. 89, 98–99, 60 S.W.3d 428, 433–34 (2001) (denying class certification in a case in which the issue was whether a contract was formed between the company and its sales force, even though the existence of a contract is determined objectively); Childs v. Adams, 322 Ark. 424, 432–33, 709 S.W.2d 641, 645 (1995) (the objective manifestation of assent may be proven by circumstantial evidence); ERC Mortgage Group v. Luper, 32, Ark. App. 19, 23, 795 S.W.2d 362, 364 (1990) (“the standard is an objective one”).
In Aon Risk Services, Inc. v. Meadors, 100 Ark. App. 272, 281–82, 267 S.W.3d 603, 610 (2007), the court distinguished ambiguous offers, which may form a contract, and indefinite offers, which cannot form a contract. An indefinite offer/agreement is “incomprehensively vague or incapable of being understood.” An ambiguous offer/agreement “may be understood and enforced by applying the rules of contract construction.” Id.
In City of Dardanelle v. City of Russellville, 372 Ark. 486, 490–91, 277 S.W.3d 562, 565–66 (2008), a joint resolution between two municipalities stated that the parties agreed to cooperate in the pursuit of funding for a sewer outfall line. In a suit for breach of the agreement, the court held as a matter of law that the terms of the joint resolution were too uncertain to establish an obligation of either party and did not constitute a legally binding agreement.
End of Document