HOW TO FORM A CONTRACT IN TEXAS
As a general rule, parties form a binding contract when the following elements are
present: (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the
minds, (4) each party’s consent to the terms, and (5) execution and delivery of the contract with the intent
that it be mutual and binding. Id. at 555-56.
The material terms of a contract must be agreed upon before a court can enforce a contract. See Williams v.
Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 235 (Tex. App.-Houston [1st. Dist] 2008, no
pet.); see also T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The interest rate
is a material term. See Williams, 264 S.W.3d at 235; T.O. Stanley Boot Co., 847 S.W.2d at 221.
“Meeting of the minds” describes the mutual understanding and assent to the agreement regarding the
subject matter and the essential terms of the contract. Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.
App.- Dallas 1999, pet. denied). Mutual assent, concerning material, essential terms, is a prerequisite to
formation of a binding, enforceable contract. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221
(Tex. 1992). In determining the existence of an oral contract, the court looks to the communications between
the parties and to the acts and circumstances surrounding these communications. Palestine Water Well
Servs., Inc. v. Vance Sand & Rock, Inc., 188 S.W.3d 321, 325 (Tex. App.- Tyler 2006, no pet.).
The elements required for establishing the existence of written and oral contracts are usually the same.
See Wal-Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555 (Tex. App.- Houston [14th Dist.] 2002, no pet.).
SOME TEXAS APPELLATE CASE LAW
08-0586
PATRICK REINHARDT v. JOE WALKER; from Brazoria County; 14th district (14‑07‑00304‑CV, ___ SW3d
___, 06‑12‑08)(Proof of Agreement, limitations, damages, reasonable cost of repairs.)
08-0609
BRENDA MITCHELL v. BETTY DOMINGO; from Lubbock County; 7th district (07‑07‑00038‑CV, 257 SW3d
34, 05‑21‑08, pet denied Dec 2008)(contract formation)(we conclude she presented more than a scintilla of
evidence to raise a genuine issue of material fact on whether the parties entered into a valid oral contract
and whether Mitchell breached the contract, thereby defeating Mitchell’s no-evidence summary judgment.
Simultaneously, accepting as true the evidence favorable to Domingo and indulging every reasonable
inference in her favor, we conclude the summary judgment evidence raised a genuine issue of material fact
defeating Mitchell’s entitlement to summary judgment as a matter of law. We hold that the summary judgment
in favor of Mitchell based on Domingo’s breach of contract claim was improvidently granted. Resultantly, we
sustain issues one and two.
Accordingly, the trial court’s judgment is reversed and the cause is remanded to the trial court for further
proceedings.
OPINION
Presenting two issues, Appellant, Betty Domingo, challenges the trial court’s order granting summary
judgment in favor of Appellee, Brenda Mitchell. Specifically, by her first issue, she maintains the trial court
erred in granting Mitchell’s no-evidence summary judgment because she presented more than a scintilla of
competent evidence in support of every element of her breach of contract claim. By issue two, she contends
the trial court erred in granting Mitchell’s traditional motion for summary judgment because genuine issues of
material fact exist. We reverse and remand.
Background Facts
According to the summary judgment evidence, beginning in 2004, Domingo and Mitchell, who were co-
workers and friends, played the Texas Lottery on numerous occasions. Their arrangement included an
agreement to pool their money to purchase tickets and split all winnings equally. At times, Mitchell would
purchase the tickets without requiring advance payment from Domingo and Domingo would promptly
reimburse Mitchell, win or lose.
On March 9, 2006, Cindy Skidmore sent an e-mail to Mitchell asking if she was interested in joining a lottery
group. After enlisting a select group of friends and co-workers, including Mitchell, Skidmore formed LGroup,
a Texas Limited Partnership, for the purpose of pooling money to play the lottery. On March 23rd, she sent a
follow-up e-mail to members of the group notifying them of a meeting on March 30th at a local restaurant to
pay and select numbers for the April 2006 drawings. The e-mail also provided, “[i]f there is someone else you
want to invite (& you feel pretty sure they won’t drop out) let me know.” Mitchell did not ask Skidmore if
Domingo could participate in the April 2006 drawings.
Domingo alleges that sometime after the March 23rd e-mail, Mitchell invited her and Cindy Ruff, another co-
worker, to participate in the lottery group for April 2006, specifically, Lotto Texas and Mega Millions. Ruff
declined the offer due to insufficient funds. When Domingo inquired about how much her contribution would
be, Mitchell offered to cover for her and be reimbursed at a later time.
On March 30th, Mitchell and other members of the group met at a restaurant to pay their share for the April
2006 tickets and contribute their numbers. Domingo was not present at this meeting. It was determined that
each member of the group owed $17. Mitchell paid her contribution, but did not contribute for Domingo’s
share. According to Mitchell’s deposition testimony, she did not have enough money with her to pay for her
share and also advance $17 for Domingo to participate. Footnote
On April 29, 2006, one of the tickets purchased by the group won. After choosing the cash value option, the
winnings totaled $20,925,315.23. Domingo’s exclusion from a share of the winnings eventually prompted her
to consult an attorney because Mitchell had told her she would cover her share of the tickets. She filed suit
against Mitchell and the LGroup for breach of contract and also alleged violations of the Texas Revised
Partnership Act. Footnote Mitchell filed a combination no-evidence and traditional motion for summary
judgment and without specifying a ground, the trial court granted summary judgment in favor of Mitchell.
By her no-evidence motion, Mitchell alleged there was no evidence of a valid contract because:
(1) she never made a valid offer to Domingo;
(2) Domingo never tendered a valid acceptance;
(3) she and Domingo never reached a “meeting of the minds” regarding the essential terms of the contract;
and
(4) Domingo never tendered sufficient consideration.
Domingo responded to the no-evidence motion by asserting there was sufficient evidence of an offer,
acceptance, meeting of the minds, and consideration to defeat the motion.
By her traditional motion, Mitchell alleged she was entitled to summary judgment as a matter of law on the
breach of contract claim because Domingo did not present evidence of a valid, enforceable contract.
Specifically, she contended the summary judgment evidence disproved:
(1) she made a valid offer to Domingo;
(2) Domingo tendered a valid acceptance; and
(3) they reached a “meeting of the minds.”
Mitchell also alleged that any oral agreement violated the Statue of Frauds because Domingo was seeking to
enforce a promise to answer for the debt of another. Domingo responded that Mitchell did not conclusively
establish the absence of a genuine issue of material fact regarding the elements of a contract. She also
asserted that the agreement was not a promise to answer for the debt of another and thus, did not violate
the Statute of Frauds.
By two issues, Domingo challenges the no-evidence and traditional summary judgment motions that resulted
in summary judgment being rendered against her. In reviewing the issues, we apply the following standards
of review.
No-Evidence Motion for Summary Judgment
In a no-evidence summary judgment motion, the movant contends that there is no evidence of one or more
essential elements of the claims for which the non-movant would bear the burden of proof at trial. Tex. R. Civ.
P. 166a(i). The trial court must grant the motion unless the non-movant produces competent summary
judgment evidence raising a genuine issue of material fact on the challenged elements. Id. See Hamilton v.
Wilson, __ S.W.3d __, No. 07-0164, 2008 WL 820717, at *1 (Tex. March 28, 2008); Morgan v. Anthony, 27 S.
W.3d 928, 929 (Tex. 2000). The non-moving party is “not required to marshal its proof; its response need
only point out evidence that raises a fact issue on the challenged elements.” Tex. R. Civ. P. 166a(i), Notes
and Comments (1997). We review the summary judgment evidence in the light most favorable to the party
against whom summary judgment was rendered, crediting evidence favorable to that party if reasonable
jurors could, and disregarding contrary evidence unless reasonable jurors could not. See Mack Trucks, Inc.
v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006); City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). See
also Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
Traditional Motion for Summary Judgment
In reviewing a traditional motion for summary judgment, this Court applies these well established rules:
1. The movant for summary judgment has the burden of showing that there is no genuine issue of material
fact and that it is entitled to judgment as a matter of law.
2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence
favorable to the non-movant will be taken as true.
3. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its
favor.
See American Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997), citing Nixon v. Mr. Property
Management, 690 S.W.2d 546, 548-49 (Tex. 1985).
For a party to prevail on a traditional motion for summary judgment, he must conclusively establish the
absence of any genuine question of material fact and that he is entitled to judgment as a matter of law. Tex.
R. Civ. P. 166a(c). Summary judgment is proper if the movant disproves at least one element of each of the
non-movant’s claims or establishes every element of an affirmative defense to each claim. American
Tobacco, 951 S.W.2d at 425; Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995).
Once the movant has established a right to summary judgment, the non-movant has the burden to respond
to the motion for summary judgment and present to the trial court any issues that would preclude summary
judgment. Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989); City of Houston v. Clear Creek Basin Authority,
589 S.W.2d 671, 678 (Tex. 1979); Barbouti v. Hearst Corp., 927 S.W.2d 37, 64 (Tex.App.–Houston [1st
Dist.] 1996, writ denied). Issues that the non-movant contends preclude the granting of a summary judgment
must be expressly presented to the trial court by written answer or other written response to the motion and
not by mere reference to summary judgment evidence. McConnell v. Southside School Dist., 858 S.W.2d
337, 341 (Tex. 1993)
Where, as here, a party files a combination traditional and no-evidence motion for summary judgment, we
first review the trial court’s judgment under the more stringent “no-evidence” standard of Rule 166a(i). See
Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004); East Hill Marine, Inc. v. Rinker Boat Co., Inc.,
229 S.W.3d 813, 816 (Tex.App.–Fort Worth 2007, pet. denied). If the non-movant fails to produce more than
a scintilla of evidence under that burden, then we need not analyze whether the non-movant’s proof satisfied
the burden under a traditional summary judgment review pursuant to Rule 166a(c). Ridgway, 135 S.W.3d at
600.
I. Analysis of Elements of a Contract
Domingo sued Mitchell for breach of contract. The basis for Mitchell’s no-evidence motion was that there
was no evidence of the elements of a valid contract between herself and Domingo. The burden then shifted
to Domingo to present more than a scintilla of evidence to raise a fact issue on whether the parties formed a
contract. The grounds for Mitchell’s traditional motion was that there was no disputed material fact issue
regarding the elements of offer, acceptance, and meeting of the minds, and there was no writing to indicate
the existence of an agreement, in violation of the Statute of Frauds.
A. Contract
The threshold question is whether Mitchell and Domingo entered into a contract. For a contract to exist,
there must be an offer, acceptance, and consideration. See Harco Energy, Inc. v. Re-Entry People, Inc., 23 S.
W.3d 389, 392 (Tex.App.–Amarillo 2000, no pet.). The existence of an oral contract may be proved by
circumstantial evidence as well as direct evidence. Harris v. Balderas, 27 S.W.3d 71, 77 (Tex.App.–San
Antonio 2000, pet. denied). In determining the existence of an oral contract, courts look at the
communications between the parties and the acts and circumstances surrounding those communications.
Palestine Water Well Services, Inc. v. Vance Sand and Rock, Inc., 188 S.W.3d 321, 325 (Tex.App.–Tyler
2006, no pet.). To determine whether there was an offer and acceptance, and therefore a “meeting of the
minds,” courts use an objective standard, considering what the parties did and said, not their subjective
states of mind. See Komet v. Graves, 40 S.W.3d 596, 601 (Tex.App.–San Antonio 2001, no pet.).
B. Breach of Contract
The elements of a breach of contract claim are (1) the existence of a valid contract; (2) performance or
tendered performance by the plaintiff; (3) breach by the defendant; and (4) damages sustained by the
plaintiff as a result of that breach. Southwell v. University of Incarnate Word, 974 S.W.351, 354-55 (Tex.App.–
San Antonio 1998, pet. denied).
C. Offer
To prove that an offer was made, a party must show (1) the offeror intended to make an offer, (2) the terms
of the offer were clear and definite, and (3) the offeror communicated the essential terms of the offer to the
offeree. KW Const. v. Stephens & Sons Concrete Contractors, Inc., 165 S.W.3d 874, 883 (Tex.App.–
Texarkana 2005, pet. denied).
D. Acceptance
An acceptance must be identical to the offer; otherwise, there is no binding contract. Long Trusts v. Griffin,
144 S.W.3d 99, 111-12 (Tex.App.–Texarkana 2004, pet. denied).
E. Meeting of the Minds
A “meeting of the minds” is not an independent element of a valid contract. It is merely a mutuality subpart of
the offer and acceptance elements. A “meeting of the minds” is a mutual understanding and assent to the
expression of the parties’ agreement. See Weynand v. Weynand, 990 S.W.2d 843, 846 (Tex.App.–Dallas
1999, pet. denied). If evidence of the parties’ mutual agreement consists of their conduct and course of
dealing with one another, their mutual agreement may be inferred from the circumstances, in which case the
contract is “implied” as opposed to “express.” Double Diamond, Inc. v. Hilco Elec. Co-op., Inc., 127 S.W.3d
260, 267 (Tex.App.–Waco 2003, no pet.). An implied contract involves an inference from circumstantial
evidence and is a question of fact. Id.
F. Consideration
A contract must be based on valid consideration. See Texas Gas Utilities Co. v. Barrett, 460 S.W.2d 409,
412 (Tex. 1970). Consideration is a bargained for exchange of promises that consists of benefits and
detriments to the contracting parties. Roark v. Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991). “It
is quite elementary that the promise of one party is a valid consideration for the promise of the other party.”
See Texas Farm Bureau Cotton Ass’n v. Stovall, 113 Tex. 273, 253 S.W. 1101, 1105 (1923). A contract that
lacks consideration lacks mutuality of obligation and is unenforceable. Fed. Sign v. Tex. So. Univ., 951 S.W.
2d 401, 409 (Tex. 1997); Belew v. Rector, 202 S.W.3d 849, 854 n.4 (Tex.App.–Eastland 2006, no pet.).
Mutual promissory obligations by the parties to the agreement furnishes sufficient consideration to constitute
a binding contract. Iacono v. Lyons, 16 S.W.3d 92, 94 (Tex.App.–Houston [1st Dist.] 2000, no pet.).
II. Analysis of Elements of the Contract as Between Mitchell and Domingo
Mitchell alleges she did not make an offer to Domingo, but if she did, some of the material terms of the offer
were lacking, making the contract invalid. She argues that price had not been agreed to and that Domingo
failed to submit numbers for the drawings, which was an essential element of the agreement. In response,
Domingo asserts that a reasonable price can be implied. She also asserts that submitting numbers was not
an essential term of the agreement. We agree with Domingo.
When all other elements of a contract have been met, a court may imply a reasonable price. See Buxani v.
Nussbaum, 940 S.W.2d 350, 353 (Tex.App.–San Antonio 1997, no writ), citing Bendalin v. Delgado, 406 S.W.
2d 897, 900 (Tex. 1966). According to Domingo’s affidavit, she was an experienced lottery player and
estimated that playing Lotto Texas and Mega Millions for the month of April 2006 would have cost
approximately $20 to $25. According to the evidence, Mega Millions was played every Tuesday and Friday
and Lotto Texas was played every Wednesday and Saturday. Looking at a calendar for April 2006 at $1 per
ticket, there were eight drawings for Mega Millions and nine drawings for Lotto Texas, for a total cost of $17
per participant. Thus, a reasonable price could have been implied.
Whether a term forms an essential element of a contract depends primarily upon the intent of the parties.
Potcinske v. McDonald Property Investments, Ltd., 245 S.W.3d 526, 531 (Tex.App.–Houston [1st Dist.] 2007,
no pet.), citing Neeley v. Bankers Trust Co. of Texas, 757 F.2d 621, 628 (5th Cir. 1985). The question is
whether the parties regarded the term as a vitally important ingredient of their bargain. Id.
Mitchell contends that submitting numbers was an essential term of the agreement and that without Domingo
complying, there was no valid contract. However, the evidence suggests that submitting numbers for the April
drawings was not an essential element of the contract. Copies of e-mails established that different numbers
were selected on the day after the LGroup met for dinner to decide on a price and submit numbers. Members
of the LGroup were also notified by e-mail and given a deadline of noon on April 1st in which to pick different
numbers. Thus, any numbers submitted at the meeting on March 30th were an uncertainty as they were
subject to being changed and thus, could not have been regarded by the parties as an essential element of
the contract.
According to Domingo, she and Mitchell frequently participated in lottery pools with co-workers. They
occasionally covered for each other and when Mitchell would advance Domingo’s share, Domingo would
promptly reimburse her. Shondra Stewart and Ellen Clemons, co-workers of Domingo and Mitchell, both gave
deposition testimony that Cindy Ruff, another co-worker, claimed she was present when Mitchell agreed to
cover for Domingo’s share of the April 2006 lottery tickets.
Mitchell testified that while she and Ruff were involved in a conversation about the lottery pool on the day
after the LGroup met to discuss the April drawings, Domingo entered and asked Mitchell “why didn’t you pay
my – did you pay my money?” Mitchell responded, “no, I didn’t have enough money last night.” Although she
did not tell Domingo she was excluded because she had not been invited to play with the LGroup, she did
testify that she did not cover for Domingo because she had not been invited to play for the April drawings.
Ruff testified that she recalled Domingo asking Mitchell why she did not cover her for the April drawings.
Domingo testified that she asked Mitchell “when do we need to pay our money for the April drawing?”
Mitchell then informed her that she did not put in for her because she did not have enough money to pay for
both of them. Mitchell added that the group was already set for April and instead invited Domingo to play for
the May 2006 drawings.
This summary judgment evidence, coupled with Mitchell and Domingo’s conduct and course of prior dealings
with one another, is sufficient to raise a genuine issue of material fact concerning the offer and acceptance
elements of the alleged contract between Mitchell and Domingo.
Regarding the element of consideration, the evidence shows that Mitchell agreed to advance Domingo’s
share of the lottery tickets and Domingo agreed to reimburse Mitchell. This exchange of promises is sufficient
consideration to create a binding contract. See Iacono, 16 S.W.3d at 94.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.
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