Ray v William G. Eurice & Bros., Inc.

Dispute

Plaintiff entered into a contract with defendant for the latter to construct a house. The contract specified that the house should be built according to a series of specifications drafted by plaintiff’s attorney. Later, defendant reneged, claiming it had not approved the specifications and that the requests of plaintiff were onerous. The trial judge held that if defendant had not contemplated the specifications, no meeting of the minds had taken place, and accordingly there was no contract.

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Rules of law

The manifestation of mutual intent to enter the contract is the execution of the contract, not the “secret intent” of the parties thereto. An objective test must be used, based on how a reasonable person would interpret the meaning of the written agreement.

Legal arguments

Although the trial judge had held that no contract existed due to a lack of the meeting of the minds, the court argued instead that the contract is not dependent on any “secret intent” of the parties thereto, but on the actual terms of the contract, provided that the contract is entered into freely and without coercion or fraud. To restrict the terms of a contract to a subjective intent would make it impossible to enforce contracts at all.

Conclusion

The court reversed, and found damages for the plaintiff in the amount of excess costs required for another builder to complete the building according to the contract specifications.

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