Also known as: part of the contract
Written by attorneys · grounded in primary & secondary sources — see below
A contractual provision or preliminary communication that forms part of the parties' final agreement. Such a provision becomes binding when the parties manifest assent to it as an element of their exchange, whether through incorporation into a later offer or through conduct recognizing the existence of a contract.
Prairie Grain Partners hired attorney Laura Mills to form a marketing cooperative. Mills emailed an unsigned draft engagement letter containing a sentence about resolving disputes with a grain elevator. The farmers accepted the representation and Mills began work. When a payment dispute later arose, the sentence operated as a binding allocation of duties because the parties' conduct incorporated the preliminary language into their agreement.
Orion Motors sent a supply agreement to Valley Auto that was silent on returns. Valley responded with an acceptance adding an end-of-quarter return term. The parties performed under the agreement for months. The return term became part of the contract because the merchants' course of dealing and trade usage incorporated the additional provision.
Select any source to read its text and confirm it supports the definition.
A borrower executed a mortgage containing a twelve-month redemption period required by state statute at the time of signing. After default the lender sought foreclosure under federal court rules allowing only six months. The statutory redemption period remained part of the contract because it was in force when the parties formed their agreement.
A landlord leased an apartment without an express warranty of habitability. The tenant discovered serious defects that rendered the unit uninhabitable. The warranty of habitability operated as part of the lease because the parties' agreement incorporated the legal obligation to provide a livable premises.
A buyer contracted to purchase cotton arriving on a ship named Peerless. Two ships bore that name and sailed from Bombay in different months. The buyer refused the later shipment. The contract term specifying the October Peerless remained part of the agreement because the parties manifested assent to that particular vessel.
A dealer sold a new car under a purchase order that limited the warranty to replacement of defective parts for sixty days and excluded all implied warranties. The buyer later discovered a latent defect. The disclaimer operated as part of the contract because the parties expressly incorporated the limitation into their agreement at formation.
A preliminary communication becomes part of the contract when the parties later manifest assent to it as a term of their agreement. The Restatement explains that even a non-offer communication can supply promises or representations that are incorporated into a subsequent offer and accepted. Conduct recognizing the existence of a contract can also integrate the earlier language.
Supporting sources
No. Contract law focuses on the objective manifestation of assent and the resulting legal relationship rather than any separate declaration that a clause is intended to have legal effect. A sentence that allocates rights or duties on a particular subject functions as a term once the parties form an overall agreement that includes it.
Supporting sources
Additional terms in a merchant acceptance are construed as proposals for addition to the contract. Between merchants they become part of the contract unless the offer expressly limits acceptance, they materially alter the deal, or the offeror objects. The parties' performance can also integrate the terms through conduct.
Supporting sources
Yes. When the engagement letter expressly incorporates the spreadsheet and ties the scope of services to the listed items, the spreadsheet manifests assent about which matters are covered and therefore constitutes a contract term on that subject.
Supporting sources
…will be imposed by the court against their consent, still such stipulation will not be given effect unless fairly made as a part of the contract of sale. Such a stipulation, relieving, as it does, the manufacturer from duties imposed by law, will be conclusively presumed to have been inserted in the contract of sale for the sole…