You Didn’t Sign a "Contract," but Could You Be Bound Anyway?

In Michigan, two parties can become bound to a contract without having prepared and signed a formal-looking document called a “contract” or “agreement.” That’s because the law provides that a contract is formed when there’s been an offer, an acceptance of that offer, and a meeting of the minds to all of the contract’s essential terms. A party makes an offer when he “manifest[s] his willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” Kloian v. Domino’s Pizza, LLC, 733 N.W.2d 766, 770-771 (Mich. Ct. App. 2006). An offer is accepted when the party to whom the offer was extended manifests his intent to be bound by the offer, and all legal consequences flowing from it, through voluntarily undertaking some unequivocal act sufficient for that purpose.” Also, the acceptance must be “unambiguous and in strict conformance with the offer,” otherwise, no contract is formed.

While offer and acceptance are pivotal factors, it's also important to determine whether there’s been a meeting of the minds on the essential terms that form the agreement. To find this, courts look to the parties’ express words and visible acts, not their subjective thoughts. Thus, if there is evidence showing that an offer was made and accepted and that the parties agreed on what the essential terms of the deal were, a contract has been formed even if it has not been put together in a formal document. Michigan courts have found contracts to exist based on an exchange of emails and correspondence. Thus, you may find that you’ve agreed to be bound to a contract before you realize it’s happened.

There are, of course, ways to protect against prematurely being bound to a contract. Those strategies are best discussed with an attorney.

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