Bob claims that Carol breached their contract. Carol responds that she never intended to enter into a contract with Bob. The intent to enter into a contract is determined with reference to
A) the conscious theory of contracts.
B) the objective theory of contracts.
C) the personal theory of contracts.
D) the subjective theory of contracts.

Question

Quizplus · Accepted Answer

The objective theory of contracts is the traditional and most widely accepted approach to contract formation in the United States. Under this theory, whether a party intended to be bound by a contract is determined by objective factors such as the parties' outward manifestation of intent (i.e., their words and conduct), rather than their subjective beliefs or intentions. Thus, Bob's and Carol's intentions are irrelevant. What matters is whether, based on their words and conduct, a reasonable person in their position would have believed that they had entered into a contract.

Bob Claims That Carol Breached Their Contract