Kabil sued Mignot for breach
of contract, alleging that the Mignot orally agreed to supply Kabil with
helicopter services for a construction job.
Mignot denied there was a
contract.
Mignot claimed that their
agent had told Kabil that they would have to examine and approve the job
site before a contract could be made.
At trial, testimony was
admitted that Kabil subjectively thought they had a deal with the Mignot.
The Trial Court found for
Kabil. Mignot appealed.
Mignot argued that the subjective testimony of what Kabil believed shouldn't
have been admitted. Mignot argued that a contract is only formed if a
reasonable person would have thought there was a contract based on what
was said.
That's known as the objective
theory of contract formation.
At trial, the jury was told
that unexpressed convictions and purely subjective reactions could have
probative bearing on the fundamental issue of whether or not an oral
contract had been formed.
That's known as the subjective
theory of contract formation.
Appellate Court affirmed.
The Appellate Court found
that "a contract has, strictly speaking, nothing to do with the
personal, or individual, intent of the parties. A contract is an
obligation attached by the mere force of law to certain acts of the
parties, usually words, which ordinarily accompany and represent a known
intent. If it were proved that a party, when he used the words, intended
something else than the usual meaning which the law imposes upon them, he
would still be held the usual meaning of the words."
Although historical case law
is muddled, for most part the modern standard is the objective standard (this case not withstanding).
Under the modern standard,
the jury is only to consider whether a reasonable person would have inferred a promise on the part of
the defendants. It doesn't matter what the specific person believed.
Some courts find that
subjective evidence is relevant, though not completely determinative.
So basically, when a court
determines whether a party has assented to an agreement, the only
intention that matters is the party's apparent, objective intention (or
the intention that a "reasonable person" would infer).
