OBJECTIVE THEORY OF CONTRACTS

Question 1

Do courts consider what the parties meant to say or do or
thought they said or did?

Answer 1

Courts do Not consider what the parties meant to say or do or
thought they said or did

Question 2

What do Courts focus on?

Answer 2

Courts focus on the parties’ actual words and conduct, deciding
how a reasonable person (objective), and NOT the undisclosed
(subjective) intent of the parties would interpret the words and
actions under the circumstances.

Question 3

No confusion on statement

Answer 3

Do not be confused by the statement that “parties form a contract
only if they have a meeting of the minds. The term “no meeting of
the minds” is more of a label used when it is determined that no
contract exists in a particular case

Question 4

objective theory of contracts

Answer 4

the black letter law (or governing
principle).

Under this legal principle, it is the outward signs of a person’s
intent to enter into a contract which determines whether a contract has been
entered into. Determined on the reasonable person (objective standard) test.

Question 5

Lucy v. Zehmer, 196 Va. 493 (1954)

Answer 5

The Court applied the Objective Theory of Contracts to determine if there
was an enforceable contract: “We must look to the outward expression of a person as
manifesting his intention rather than to his secret and unexpressed intention. The law
imputes to a person an intention corresponding to the reasonable meaning of his words and
acts.”