Legal Question in Construction Law in Wisconsin

Contractors

Is a Proposal considered a legal and binding contract. Or is the exchange of money considered the binding agreement


Asked on 8/29/08, 11:46 am

1 Answer from Attorneys

J. Norman Stark J. Norman Stark , Attorney, Architect

Re: Contractors

Dear Inquirer: A proposal is just that, much like an invitation to a dance. However, the proposal is only valid and binding when accepted, either orally, or in writing by signature. The payment of money merely binds the agreement.

To prove the existence of a contract, a party must establish the essential elements of a contract, namely: an offer, an acceptance, a meeting of the minds, an exchange of consideration (money), and certainty as to the essential terms of the contract. * * * 'In order to declare the existence of a contract, both parties to the contract must consent to its terms ** * there must be a meeting of the minds of both parties * * * and the contract must be definite and certain.' * * * In order to prove the existence of a written contract, the essential elements of the contract must be part of a writing, or part of multiple writings that are part of the same contractual transaction." Juhasz v. Costanzo (2001), 144 Ohio App.3d 756, 762. (Citations omitted.)

" 'Typically, a price quotation is considered an invitation for an offer, rather than an offer to form a binding contract.' * * * [A] buyer's purchase agreement submitted in response to a price quotation is usually deemed the offer." Dyno Constr. Co. v. McWane, Inc. (C.A.6, 1999), 198 F.3d 567, 572 (Citations omitted.) See, also, TLG Electronics, Inc. v. Newcome Corp. (Mar. 5, 2002), Franklin App. No. 01AP-821. "However, a price quotation may suffice for an offer if it is sufficiently detailed and it 'reasonably appear[s] from the price quotation that assent to that quotation is all that is needed to ripen the offer into a contract.' " Dyno Constr. Co., quoting Quaker State Mushroom Co. v. Dominick's Finer Foods, Inc., of Illinois (N.D.Ill. 1986), 635 F.Supp. 1281, 1284.

"Mutual mistake is the mistake of all parties to the contract. Reformation is available where it is shown that the written instrument does not express the true agreement entered into between the contracting parties by reason of mistake common to them; in such a case equity affords the restorative remedy of reformation in order to make the writing conform to the real intention of the parties."

When in doubt, retain an experienced Attorney to guide and advise you! Good luck.

Sincerely, J. Norman Stark, cleveland, Ohio.

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Answered on 8/29/08, 1:34 pm


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