Kabil Developments Corp. v. Mignot
566 P.2d 505 · Oregon Supreme Court · 1977
Facts
Kabil Developments Corporation alleged an oral agreement with Inland Helicopters for helicopter services for a construction job, which Inland Helicopters (owned by defendants Mignot) denied. Inland did not perform, and Kabil obtained services elsewhere at a higher cost, leading to a jury verdict for Kabil. On appeal, defendants challenged the admissibility of testimony from Kabil's vice president regarding his subjective belief that a contract had been formed.
Issue
The primary issue on appeal is whether the trial court erred by allowing a party's witness to testify about their subjective belief that a contract had been formed, potentially misleading the jury into finding a contract based on subjective intentions rather than objective manifestations of mutual assent.
Holding
The court affirmed the lower court's decision, holding that it was not error to permit testimony about a party's subjective belief of being bound, provided the jury was properly instructed on the objective test for contract formation. The jury was instructed that the manifestation of intention, not actual or real intention, is controlling.
Rule
While contract formation is governed by the objective theory, requiring objective manifestations of mutual assent rather than secret intentions, a party's subjective testimony about their belief regarding contract formation can be admissible as evidence bearing on their behavior and perceptions during negotiations, provided the jury is properly instructed on the objective standard.
Read the full opinion on CourtListener
Case brief last reviewed . Prepared by CaseReader from the published opinion.