Mutual Assent

Case Examples

• Franchising: The standard for determining mutual assent is whether a reasonable person would conclude that mutual assent exists. In Siert v. Spiffy Franchising, LLC ., 758 F. Supp. 3d 1142, 1147 (N.D. Cal. 2024), a franchisee sued the company from which she was franchising, claiming that she did not have adequate notice of the choice of forum or choice of law provisions in the contract. The court agreed and stated that there was no mutual assent, as a reasonable person would not have been put on notice of these provisions. Id . The court further stated that “the party relying on the contractual provision establishes that the other party had notice and gave some indication of assent to the contract,” and that a key test for mutual assent is “what the outward manifestations of consent would lead a reasonable person to believe.” Id .
• Employment: If the contract was written and both parties had a chance to review it prior to signing, mutual assent to all of its terms will be presumed. In Thomas & King, Inc. v. Jaramillo, No. CIV.A.08-191-JBC, 2009 WL 649073, at *5 (E.D. Ky. Mar. 10, 2009), a former employee claimed that she was not aware of an arbitration clause in her employment contract. Nevertheless, she admitted that she had the opportunity to review her employment contract prior to signing it and joining the company. The company proved that the arbitration clause was in the original contract. Id . Therefore, the court found that there was mutual assent between the parties about the arbitration clause and forced the parties to submit to arbitration rather than go through the court system. Id .
• Verbal contracts: Clear testimony by one of the parties that they entered into a verbal contract is considered presumptive evidence that a verbal contract exists, especially if the other party takes actions that indicate assent. See New Prime, Inc. v. Brandon Balchune Constr., Inc., No. 3:14-CR-2410, 2017 WL 6419095, at *3 (M.D. Pa. Dec. 15, 2017). In that case, a member of the partnership attempted to claim that no partnership had been formed. However, the party had previously told others of the partnership and had benefited from the partnership, so the court determined there was mutual assent. Id .
• Electronic contracts: Courts have also recognized that in the modern era, consumers often do not have the direct ability to negotiate the terms of certain agreements, particularly those involving terms of service or privacy policies. Therefore, the courts have concluded that such mutual assent is determined by what a reasonable person would do under the circumstances. See In re Celsius Network LLC, 647 B.R. 631, 649 (Bankr. S.D.N.Y. 2023), leave to appeal denied, No. 23-CV-523 (JPO), 2023 WL 2648169 (S.D.N.Y. Mar. 27, 2023)