But also these scholars, known as „subjectives“, realize that by the end of the 19th century, the other side, the „objectivists“, had taken over, and objective theory is the widely accepted theory. The acute dichotomy between the objective and subjective theories of the contract should not indicate that an ordinary and daily agreement would commonly be regarded as a binding contract under one theory, but not under the other. If two parties enter into an agreement, subjectively considering being bound by the agreement, and take external actions showing their intention to be bound by the agreement, then a court that applies either subjective theory or objective theory of contract law would come to the same conclusion as the parties entered into a binding contract. The distinction between objective and subjective norms sometimes arises when a person claims that he or she has spoken jokingly. The vice president of a company that made boxboards used in gambling told the Washington State Game Commission that he would pay $100,000 to anyone who found a „curved board.“ Barnes, a bartender who had bought two boards that had gone wrong some time earlier, brought one to the company`s office and asked for payment. The company refused and claimed that the statement was made jokingly (the public, at the Commission hearing, had laughed at the time of the offer). The court contradicted and found that the $100,000 deposit should be interpreted as a means of promoting punchboards: objective contract theory states that an agreement between the parties is legally binding if, according to a person who is not a contracting party, 3 min. Read some differences of opinion as to whether COMMON LAW contracts required judges to determine the subjective intent of the parties to determine the existence of either party or whether judges were required to consult the external actions of the parties and then objectively determine whether a contract had been entered into. Some scholars argue that the common law has long used an objective test for contract recognition. Other scholars and writers argue that the widespread use of objective contract theory in the courts was a much more recent phenomenon, perhaps developed during the late 19th century. Although agreements can be adopted in any form, including unspoken behaviour between the parties, they are generally structured in the form of an offer and acceptance. Single Code of Trade, Section 2-204 (1). These two components will be at the centre of our discussion.
However, note that not all agreements in the broadest sense must consist of an offer and acceptance, and it is therefore quite possible that two people will reach an agreement without entering into a contract. For example, people may agree that the weather is pleasant or that it would be better to go to Chinese food rather than watch a foreign movie; In neither case, no contract was entered into. One of the main tasks of contract law is to resolve legally binding agreements – treaties – of agreements that are not. The court disregards the subjective intent of a party that is its actual state of mind and focuses more on objective intentions which, in the same circumstances, are the intention of a rational person. It does not interfere in a person`s personal mental sphere, but looks at the situation from the point of view of a reasonable person. If the subjectivity of intent plays a more important role in determining the applicability of a treaty, it will broaden the scope of the treaties to be created and will not be limited to being formed solely on the basis of objective intentions.