PJC Business

C ONTRACTS

PJC 101.9

PJC 101.9 Instruction on Formation of Agreement In deciding whether the parties reached an agreement, you may consider what they said and did in light of the surrounding circumstances, including any earlier course of dealing. You may not consider the parties’ unexpressed thoughts or intentions. COMMENT When to use. If appropriate, PJC 101.9 should be submitted with the question of the existence of a contract (PJC 101.1) to confine the jury’s deliberations on the issue of contract formation to legally appropriate factors. Source of instruction. An agreement may be implied from and evidenced by the parties’ conduct in the light of the surrounding circumstances, including any earlier course of dealing. McAllen Hospitals, L.P. v. Lopez , 576 S.W.3d 389, 392 (Tex. 2019). The supreme court has explained that the parties’ intent expressed in the text should be “understood in light of the facts and circumstances surrounding the contract’s execu tion.” Houston Exploration Co. v. Wellington Underwriting Agencies , 352 S.W.3d 462, 469 (Tex. 2011). Surrounding circumstances include the commercial or other setting in which the contract was negotiated and facts that give a context to the transaction between the parties. Houston Exploration Co. , 352 S.W.3d at 469 (citing Williston on Contracts § 32.7 (4th ed. 1999)). However, “evidence of surrounding facts and cir cumstances . . . cannot be used to add, alter, or change the contract’s agreed-to terms.” Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc. , 590S.W.3d471, 485 (Tex. 2019). Only what the parties “said and did, rather than the parties’ subjective state of mind,” may be considered. Lindsey Construction, Inc. v. AutoNation Financial Ser vices, LLC , 541 S.W.3d 355, 363 (Tex. App.—Houston [14th Dist.] 2017, no pet.). Generally, silence and inaction cannot be construed as an assent to an offer because “[s]ilence as to a material term differs from silence as to an immaterial or non-essen tial term.” Texas Ass’n of Counties County Government Risk Management Pool v. Matagorda County , 52 S.W.3d 128, 132 (Tex. 2000) (applying 2 Williston on Con tracts § 6.49 (4th ed. 1999)). “Parol evidence rule” distinguished from “surrounding circumstances” evidence. The supreme court has provided the following guidance concerning the distinctions between parol evidence and surrounding circumstances: “[O]bjectively determinable facts and circumstances that contextualize the parties’ transaction” may help clarify the parties’ intent as expressed in the text of their written agreement. URI , [ Inc. v. Kleberg County ,] 543 S.W.3d

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