MBE Rules · Contracts
Objective theory of contracts
Restatement §17
The rule
Contract formation is judged by the objective manifestations of the parties, not subjective intent. A reasonable person standard applies — if a party's words and conduct would cause a reasonable offeree to believe an offer was made, an offer exists, regardless of secret intent.
In plain English
Contracts are based on what people say and do, not what they secretly think. If it looks like an offer to a reasonable person, it's an offer.
Worked example
The defendant jokingly offers to sell his car for $500 in front of friends. If a reasonable person would think he's serious, it could be a valid offer, even if he didn't actually intend to sell.
Memory hook
Objective over subjective: actions speak. Contracts hinge on visible actions, not hidden thoughts.
The trap
Students think: intent matters most. Wrong, because subjective intent is irrelevant. The actual test is the reasonable person standard.
How examiners test it
The MBE loves: party thinks they're joking, offeree takes it seriously. Trap: students assume no contract due to hidden intent — but outward actions control.
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