Race horse breeder Melinda Smartay and sportsman Santé Sharpe had engaged in intermittent discussion and friendly argument over the sale price of "Intermittent Lightning," a thoroughbred. After they finally signed a contract transferring ownership to Sharpe, he confessed, "Y'know, I was prepared to offer you another 100 grand for that beauty." Smartay replied, "Well, I was prepared to let you steal it for a 100 grand less." Accordingly,
A)there was no valid contract since there was no meeting of the minds.
B)there was a valid contract under the objective theory of contracts.
C)horse-trading is a field unto itself where unique and special rules apply; their deal should be submitted to the official State Racing Board for review and approval.
D)contracts for the sale of goods require specific court approval and because none had yet occurred the agreement can be rescinded.

Question

Race horse breeder Melinda Smartay and sportsman Santé Sharpe had engaged in intermittent discussion and friendly argument over the sale price of "Intermittent Lightning," a thoroughbred. After they finally signed a contract transferring ownership to Sharpe, he confessed, "Y'know, I was prepared to offer you another 100 grand for that beauty." Smartay replied, "Well, I was prepared to let you steal it for a 100 grand less." Accordingly,
A)there was no valid contract since there was no meeting of the minds.
B)there was a valid contract under the objective theory of contracts.
C)horse-trading is a field unto itself where unique and special rules apply; their deal should be submitted to the official State Racing Board for review and approval.
D)contracts for the sale of goods require specific court approval and because none had yet occurred the agreement can be rescinded.

Quizplus · Accepted Answer

The objective theory of contracts states that a contract is valid if, based on the outward expressions of the parties (such as their actions and words), a reasonable person would conclude that they intended to create a legally binding agreement. In this case, despite their private thoughts or undisclosed intentions, Smartay and Sharpe expressed their agreement to the terms of the sale through signing a contract, making it valid under this theory.

Race Horse Breeder Melinda Smartay and Sportsman Santé Sharpe Had