Objectivity, Subjectivity, and Incomplete Agreements

Abstract

It might seem that the court's role in resolving a contract dispute is just to hold the parties to the resolution that they intended. But the law uses objective tests for the existence and content of a contract. I argue that the content of an agreement is determined by the meaning of the conduct by which the parties agreed. Objective tests are not a departure from the law's central purpose of enforcing agreements.

This objective view of agreement might seem to support a different view of contract adjudication: that the task of the court is only to enforce the terms of the agreement (as identified by the objective test). That view of the role of courts is too limited because the terms of agreements, understood on the objective view of agreement, are typically incomplete in significant respects. The conclusion is a view of the role of courts in which they must commonly give an outcome that was not intended by the parties, and that is not determined by their agreement. Courts must do so if they are to give effect to the intentions of the parties, and to their agreements.