Restatement (Second) of Contracts · Section § 17
Section 17 outlines the requirement of a bargain for the formation of a contract, emphasizing mutual assent and consideration.
Source: Restatement Restatement (Second) of Contracts § § 17
The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
To form a valid contract, both parties must agree to the terms (mutual assent) and there must be consideration, meaning something of value is exchanged. This foundational principle ensures that contracts are based on a fair agreement between parties.
Mutual assent can be demonstrated through offer and acceptance.
Consideration must be legally sufficient but does not need to be equal.
Illustration 1
If A offers to sell a car to B for $5,000, and B accepts, there is mutual assent and consideration.
Illustration 2
If A promises to give B a gift without any exchange, this does not constitute a contract under § 17.
This case illustrates mutual assent where both parties believed they were entering into a binding agreement.
This case highlights the necessity of consideration for the enforceability of contracts.
Understanding § 17 is essential for legal practitioners to assess whether a valid contract exists. It underscores the importance of having both parties in agreement and exchanging value, ensuring contracts are enforceable in law.