Objective Theory of Contract

The Objective Theory of Contract states that the validity and enforcement of a contract are based on how a reasonable person would interpret the words and actions of the parties involved, rather than their personal intentions or feelings. This means that courts look at what was objectively communicated and understood at the time of agreement, rather than trying to infer what someone privately thought or intended. Essentially, if a clear, reasonable interpretation of what was said or done indicates a mutual agreement, then a contract exists, regardless of any secret intentions.