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Bridge City Family Med. Clinic, P.C. v. Kent & Johnson, Ltd. Liab. P'ship - 270 Or. App. 115, 346 P.3d 658 (2015)

Rule:

Even when it has not been reduced to a formal writing, a valid contract can be created by an offer and its unqualified acceptance. To determine whether the parties intended to enter into a binding agreement, Oregon courts examine the objective manifestations of intent, as evidenced by the parties' communications and acts. Those manifestations of intent must show that there has been a meeting of the minds as to the contract's terms and that no material terms remain for future negotiation. Thus, the offer to form a contract must be certain so that upon an unqualified acceptance the nature and extent of the obligations of each party are fixed and may be determined with reasonable certainty.

Facts:

The appeal presents an issue of contract formation. Defendants represented plaintiff in arbitration. Dissatisfied with the result, plaintiff contacted defendants' malpractice insurer, the Professional Liability Fund (PLF), regarding possible claims against defendants. Bunker, plaintiff's president, and Schafer, the adjuster on behalf of the PLF, exchanged several emails discussing a settlement. When plaintiff later brought this action, defendants moved for summary judgment, arguing that a binding settlement agreement had been reached. Since after several correspondences in negotiating for the settlement amount, the parties agreed to the amount of $19,000.The trial court agreed, granted defendants' motion, and entered a judgment of dismissal. 

Issue:

Based on the correspondences between the parties was there a valid contract that was entered into by the parties and not just a mere “willingness” to settle on the part of plaintiff?

Answer:

Yes

Conclusion:

By continuing to negotiate only the dollar term of a settlement without objecting to a proposed mutual release mentioned in each of the opposing party's communications, a party tacitly assented to the inclusion of the mutual release, and a meeting of the minds occurred as to the material terms of the agreement. A statement that the mutual release would not be effective until signed by all parties did not prevent the formation of a contract, but made the signing of the release a condition precedent to its performance

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