8/11/22, 7:20 PM What Is Subjective Approach Contract Law?
What Is Subjective Approach Contract Law?
Subjective approach contract law refers to a legal doctrine that regards a contract formed on the
basis of a subjective meeting of minds as legally binding. • 3 min read
1. What Is the Subjective Approach to Contact Law?
2. Understanding Intent in Contract Law
3. Subjective and Objective Intent Under Contract Law
4. Implications of the Subjective Approach
Subjective approach contract law refers to a legal doctrine that regards a contract formed on the
basis of a subjective meeting of minds as legally binding. It requires the court to consider a
contracting party's state of mind when determining whether a contract is legally enforceable. If an
objective approach is used, the court will look at the case from the point of view of a rational
person. While many legal experts reject the subjective approach, there are some who believe it
should play a more important role in contract law.
What Is the Subjective Approach to Contact Law?
The subjective approach to contract law ([Link] refers to a
legal theory that defines a contract as an agreement in which there is a subjective meeting of the
minds between the parties involved. When using this approach, the court will look at the
subjective expectations and anticipations of the parties and ignore the contract's objective
language. However, some courts and commentators have rejected this theory, preferring the
objective approach instead.
Understanding Intent in Contract Law
From a legal perspective, intent can be defined as an individual's state of mind when performing
an act or behaving in a certain manner. It is the aim or reason of a sequence of activities that the
person wishes to follow. According to contract law, a contract is only legally enforceable if the
parties show an intention to be legally bound.
In addition, a party must express his or her intention through unambiguous words or actions. The
other party should understand the words or actions as the former party had intended for him or
her to. However, this is not always the case. Sometimes, there may be miscommunication
resulting from certain factors, such as:
Wrong selection of words or actions.
Misunderstood or differently comprehended materialization of intent.
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8/11/22, 7:20 PM What Is Subjective Approach Contract Law?
Intentional concealment of secrets.
Improper communication can lead to a conflict regarding the validity of a contract and its terms.
There are many legal cases where parties agree to follow a course of action, but they had no
intention to enter into a legally binding agreement with each other. Contract law seeks to
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Subjective and Objective Intent Under Contract Law
To determine whether parties to a contract have the intention to start a legal relationship, the
court uses the test of contractual intent. Such a test is objective and not subjective in nature. It
uses an objective approach to validate the contract's enforceability.
The court disregards a party's subjective intent, which is his or her actual state of mind, and
focuses more on objective intent, which is the intention of a rational person under the same
circumstances. It does not interfere in a person's personal mental sphere but looks at the
situation from a reasonable person's point of view.
It is not necessary to have a subjective meeting of the minds to make a contract legally
enforceable. The court evaluates the entire situation and attempts to find out whether it will be
rational to ascribe such an intention to the parties. In the event the requirements of the
contractual test of intent are not met, the court will assume the party under consideration did not
have the intention to enter into a legally enforceable contract ([Link]
binding-contracts). A disparity may exist between a party's objective intent and his or her
subjective intent.
Implications of the Subjective Approach
Some legal experts believe the subjective approach to contract law should be given more
importance. This is because limiting the creation of contracts to objective intent alone may unduly
restrict the formation of contracts ([Link]
binding-contract). This approach, however, has its positive and negative implications.
If subjectivity of intent plays a more significant role in determining the enforceability of a contract
([Link]
agreements/3749), it will broaden the scope of contracts being created and not limit them to
being formed based on objective intent only. As such, it can facilitate the creation of genuine
contracts.
Nonetheless, the problem with the subjective approach to contract law is that it may require the
court to consider and give unnecessary importance to data that may not be accurate or reliable.
This can undermine the court's ability to deliver justice. Then again, if a party's subjective intent is
backed by valid and trustworthy evidence, it can enhance the justice delivered.
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8/11/22, 7:20 PM What Is Subjective Approach Contract Law?
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