Chapter 2 Self-test questions

. What approach have the courts generally adopted in assessing the intentions of the parties to a contract, and why?

A subjective approach: the courts require a 'true meeting of the minds' in order to find a contract and will therefore interpret an offer by reference to what has actually passed through the mind of the offeror

An objective approach: in order to safeguard certainty in commercial transactions and avoid the evidential difficulties inherent in interpreting subjective intentions

An objective approach, but only insofar as the offeree has changed his position in reliance on the 'objective' terms: based on the doctrine of estoppel, the courts reason that a party should not be entitled to create legal rights for himself in denial of the reality that the offer does not reflect the offeror's intentions.

. In Smith v. Hughes (1871) LR 6 QB 597, the Court of Appeal clearly adopted a 'detached objectivity' approach to the question of the intention of the parties

True

False

. When, if ever, is the objective principle qualified by a 'subjective element'?

When the parties are not subjectively in agreement because the claimant knows that the defendant has made a mistake (i.e. he could not reasonably have believed that the offer expressed the other's real intentions).

When the parties are not subjectively in agreement because the claimant mistakenly believes that the contract means something other than what is stated on its face.

When the parties are not subjectively in agreement because the claimant induces or causes a mistake by the defendant.

Never.

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