Supp. To § 1.9 Agreement Defined

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(A) The following cases cite this section or a predecessor section:

(1) In the Matter of Chad Turner, 156 F.3d 713 (7th Cir. 1998) . The court held that a debtor's unilateral reaffirmation of a pre-petition debt does not constitute a valid reaffirmation ''agreement'' for the purposes of 11 U.S.C. § 524, enabling the debtor in a chapter 7 proceeding to reaffirm an otherwise dischargeable pre-petition debt by agreeing to pay all or part of it. Fundamental to the concept of an agreement is an expression of mutual assent between the parties to the agreement.

(2) Tiffe v. Groenenstein, 2003 Ohio App. LEXIS 1274 (Ohio Ct. App. Mar. 20, 2003) . At a free interview with the defendant, who provided advice and consultation concerning resume preparations and interview skills, the plaintiff tendered a check to the defendant with the understanding that the plaintiff was to provide the defendant with additional services. The next day, the plaintiff changed her mind and requested that the check not be cashed. The defendant cashed the check but informed the plaintiff that she was entitled to a partial refund since all of the services had not been provided. The plaintiff sued to recover the full amount of the check. Deferring to the facts as found by a magistrate, the trial court entered judgment for the plaintiff. Citing Corbin, the instant court held that the parties did not possess the requisite ''meeting of the minds'' to form a contract. The court also rejected the defendant's claim in quasi contract on the footing that no benefit had been provided to the plaintiff.

(3) Phillips v. May, 2004 Ohio 5942 (Ohio App. Geauga Cty. Nov. 5, 2005) . May appealed from a trial court decision that she had entered into a valid land installment contract with her son, Phillips. On November 5, 1995 the parties signed an agreement which stated that May was selling to her son for $150,000, to be paid in monthly installments of $650 at ''9 % Maximum,'' property located at 11327 Taylor May Road. It further stated that if her son were to sell the property, May had the first option to purchase it. At trial, the parties gave conflicting testimony regarding the circumstances and intent behind the agreement. May testified that she was not certain at the time of signing that she wanted to sell the parcel. May further testified that she had only agreed to write down some proposals, that the written terms were dictated to her by Phillips, and that after signing the agreement she had assumed that Phillips would be unable to obtain financing. Phillips claimed that the parties had discussed the sale of the land and had reached an agreement as to its sale. Phillips moved into the cottage on the property in the spring of 1996. Except for a 6 or 7 month period, Phillips made monthly payment to May of $650. In April 1996, Phillips began reimbursing May for the cost of the homeowner's insurance for the cottage and in September 1996 began paying the property taxes. On appeal, May claimed that the trial court's finding that the parties intended the agreement to be an enforceable contract was against the weight of the evidence since it was not her intent to form a binding contract. Notwithstanding her testimony, the document stated that she was selling the property to her son. Citing Corbin, the court explained that the relevant inquiry is the manifestation of intent as seen through the eyes of a reasonable observer, rather than the subjective intention of the parties. May's subjective intent was irrelevant, and the trial court's order was affirmed.

(B) The following case is noteworthy:

(1) Aleman v. Chugach Support Servs., Inc., 2007 U. S. App. LEXIS 10350 (4th Cir. 2007) . The plaintiffs worked as carpenters under a collective bargaining agreement between their union and the defendant that contained a clause requiring all grievances, expressly including claims of discrimination from any and all federal and state antidiscrimination laws, to be submitted to arbitration. The plaintiffs alleged such claims and argued that they were not bound by the arbitration provision because of their limited ability to read English as compared to Spanish and the defendant's failure to provide a translated version of the collective bargaining agreement to them. Citing § 17, comment c, of the Restatement (Second) of Contracts, they argued that there was no true agreement between them and the defendant concerning arbitration since there was necessarily no ''meeting of the minds'' in light of their disability in reading English. The instant court found that this argument ignored the term ''collective'' in ''collective bargaining agreement'' which refers to an agreement between the employer and the union as contrasted with an agreement between the employer and each member of the union. The formation of a collective bargaining agreement extinguishes the individual employee's power to order his own relations with the employer and creates a power vested in the chosen representative to act in the interests of the employees. The court also noted that claims under civil rights laws may be subject to arbitration. Thus, assuming that the plaintiffs did not and could not read the relevant provisions of the collective bargaining agreement, they had nonetheless agreed to its provisions through their chosen representative.

Supplement to Notes in Main Volume

2. Landers-Scelfo v. Corporate Office Systems, 827 N.E.2d 1051 (Ill. Ct. App. 2005) . The plaintiff brought this action for unpaid commissions she allegedly earned as an account executive for the defendant. Inter alia, the plaintiff pled that she was entitled to collect under the Illinois Wage Collection Act which required the defendant to plead that she had an ''employment agreement'' with the defendant. The trial court dismissed this count of her complaint. Relying on § 3 of the Restatement (Second) of Contracts defining ''agreement,'' the instant court reversed in holding that ''agreement'' does not require a formally negotiated contract. ''Agreement'' is broader than ''contract'' and requires only a manifestation of mutual assent between the parties. Parties may enter into an ''agreement'' absent the formalities and accompanying legal protections of a contract. It was not necessary for the plaintiff to plead all contract elements if she could plead facts showing mutual assent to terms that support a recovery. The plaintiff's pleading was effective in this respect.

4. United States v. Blankenship, 382 F.3d 1110 (11th Cir. 2004) . To satisfy a requirement of the United States Department of Transportation that at least 12 percent of its grant to the Florida Department of Transportation (FDOT) would go to a certified disadvantaged business enterprise (DBE-a small firm owned and controlled by a woman or minority), FDOT required the general contractor (Granite) to ascertain such compliance. Granite contracted with a certified DBE. Granite hired H. J. Trucking, a licensed DBE, to do a portion of the highway construction work, but, unknown to Granite, H. J. Trucking never owned more than one dump truck and had no employees. The owner of H. J. Trucking (Glover) contracted with the Blankenships who owned and controlled Tarand Transport to do all of the work while making Granite believe it was being performed by H. J. Trucking. Various documents were created including subcontracts and leases to help foster this appearance. Inter alia, the defendants were charged with violating a federal statute of knowingly and wilfully making use of ''false writings'' to create this false impression (18 U.S.C. § 1001). While agreeing with the prosecution that certain writings such a wage and hour records were ''false writings,'' the court found that the contracts and leases did not meet that definition. The contracts and leases were between H. J. Trucking and Tarand and merely stated what the parties intended to do. The government argued that they were false writings since the parties did not intend to perform the contracts or leases. The court found the government's argument only superficially persuasive. It distinguished applications to government programs in which the applying party is certifying the truth of the statements. The court, however, emphasized that a contract seeks only to establish a legal relationship between the parties. It is not illegal for a party to breach a contract since a contract allows a party two viable options, i.e., to perform the contract or compensate the other party for its loss caused by a breach. The court pointed to the concept of ''efficient breach'' as encouraged breaches where the breaching party will still profit after providing compensation to the other party. Moreover, a party may waive a breach by the other party. The fact that neither party subjectively intended to perform these contract was deemed irrelevant. Quoting Corbin, the court emphasized the general principle that a contract is to be determined objectively regardless of the subjective intentions of the parties. These contracts created the legal rights they purported to create and their presentation to Granite did not convey an implicit guarantee that either party intended to perform them. While admitting that the contract may, in one sense, be characterized as ''shams'' since they were entered into in bad faith and neither party intended to perform them, the court held that they did not meet the definition of ''false writings'' since they were not forged or altered, nor did the contain factual misrepresentations. It is important to recognize that the court was necessarily construing this criminal statute narrowly in deciding that Congress did not intend to enact a ''false contract'' law that would occupy an area ''that has been a cornerstone of the common law for the better part of a millennium.''

6. Allen v. Allen, 2004 Ala. Civ. App. LEXIS 978 (Dec. 30, 2004) . A husband appealed from a divorce judgment, claiming that the trial court erred in adopting ''almost verbatim'' the terms of an alleged settlement agreement that he executed but supposedly did not understand and that allegedly did not represent the agreement to which he thought he was agreeing. The appellate court rejected these contentions, noting that the husband's objective manifestation of intent was contrary as evidenced by the language of the agreement. The court cited Corbin's explanation that a person ''may be 'bound' by a contract in ways that he did not intend, foresee, or understand. The juristic effect (the resulting legal relations) of a man's expressions in word or act may be very different from what he supposed it would be.'' The court explained that contract law is premised on an objective rather than a subjective manifestation of intent. When the parties reduce their agreement to a signed writing, the writing becomes the sole expositor of their agreement, absent mistake, fraud or ambiguity. Further, in this instance, the husband began performing certain of the obligations contained in the settlement agreement within days after its execution. This course of performance was inconsistent with his alleged understanding of the settlement agreement.

United States v. Turner, 2006 U.S. Dist. LEXIS 46891 (D. D. C. 2006) . The defendant claimed that she had been granted an informal ''equitable'' immunity in a discussion immediately prior to her grand jury testimony when the Government told her that she was not a target, the Government was not interested in her, and if she told the truth, she would have nothing to worry about. On the basis of this alleged agreement, she moved to suppress statements made to the police and the grand jury. The court noted that agreements to exchange cooperation and testimony for immunity are governed by traditional principles of contract law. As in other issues of contract formation, the court applies an objective standard to the circumstances that allegedly gave rise to the agreement. ''The claimed subjective standard of the defendant is irrelevant to the analysis.'' The court concluded that, accepting the defendant's representations as true, the alleged statements were insufficient to create the kind of agreement necessary for informal ''equitable'' immunity to attach. There was no mention of the term ''immunity,'' there was no discussion as to whether she would or would not be subject to prosecution, and no discussion as to whether her statements would or would not be used against her in the future. There was also a question as to whether the defendant ''told the truth'' her account of the ''agreement'' required her to do. There was no objective ''meeting of the minds.''