Contracts and Sales Multistate Bar Practice Exam

How is mutual assent defined in contract law?

1. Agreement on all terms without consideration

2. Words or conduct showing a present intention to contract

3. A written document signed by both parties

4. Verbal agreement in the presence of witnesses

The correct answer is: Words or conduct showing a present intention to contract

Mutual assent in contract law refers to the willingness of two or more parties to enter into a contract, which is achieved through an offer from one party and acceptance by another. This concept is primarily demonstrated through words or conduct that clearly indicate a present intention to create a binding agreement. It emphasizes that mutual consent can be established not only through formal written documents but also through informal verbal exchanges or actions that reflect the parties' agreement. By focusing on the present intention to contract, this definition captures the essence of mutual assent as a fundamental component of contract formation. It allows for flexibility in how agreements can manifest, making it clear that mutual assent does not require rigorously detailed or formalized terms but rather a clear mutual understanding between the parties involved.