1. What is Subjective Intent?
2. Subjective Intention of the Parties
3. What Happens When the Language is Unclear?
4. Subjective and Objective Intent in Contract Law

Subjective intent refers to a person's state of mind instead of expressed intentions.

What is Subjective Intent?

When people experience scrutiny, they also deal with subjective intent. For instance, someone sells you jewelry and tells you that it's made of gold and you believe that person. You pay money for the jewelry believing it is made of gold, but it turns out the jewelry is not. The seller must return the money and take the jewelry back.

The difference between subjective intent and fraud is that with subjective intent, no one is trying to deceive anyone. Subjective intent deals with the state of a person's mind instead of objective manifestations, which deal with intentions.

Subjective Intention of the Parties

When courts interpret contracts, a two-step process is usually involved.

  • What are the contract's terms?
  • What do the terms mean objectively?

These questions explain the parties' intentions as shown in the contract. Interpreting a contract has nothing to do with subjective intention or the parties' mental state.

What Happens When the Language is Unclear?

Objective intention occurs only if the words used in the contract are known by both parties. But what happens if the contract's language is unclear? Then the court must figure out the meaning by looking at certain circumstances. If this occurs, subjective intention remains irrelevant.

The courts also cannot examine the negotiations made before the contract was approved. It cannot draw conclusions about what the contract meant unless there's knowledge about surrounding circumstances.

Most times subjective intent isn't considered, so make sure the contract is carefully worded. If there's ambiguity, clarify the words found in the contract and make known the intended meaning in writing to the other party.

Subjective and Objective Intent in Contract Law

Contract law looks at objective intent instead of subjective intent when looking into contract formation. Legally, the intent is considered a state of mind when someone performs an act or behaves in a specific manner. It is the basis for the activities the person intends to make.

A contract is legally binding if the intention is understood by both parties. The intention must be specified clearly so that both parties understand the words and actions found in the contract. However, there might be miscommunication that occurs due to deliberate actions, wrong choice of words, or misunderstanding. As a result, it might be difficult to enforce the contract or challenge its validity as the basis for forming a contract involves intention.

If the dispute ends up going to court, the court examines the intention to create the legal obligation. Not all agreements are enforceable under the law, especially if one party believes there was an agreement set in place but nothing that states a legal intention. To determine if the intention is legally bound or not, the court uses the objective test of contractual intent.

The court also disregards the party's state of mind was, which is the subjective intent and focuses more on what someone else would think in the same situation. This is the objective intent. The court analyzes the circumstances and determines if the intention. If the contractual tests required aren't met or satisfied, the court assumes the party didn't plan or intend to agree to the legally binding contract.

It is difficult to determine what a party was thinking subjectively without looking into the objective aspect. The subjective approach means you might look at data, which might not be accurate. If you have valid and trustworthy evidence available, this can enhance your case.

For example, two people agree that they would follow a specific goal. They don't sign a contract because they don't want to deal with the hassle, so they shake hands. Objectively, there is no contract, even though they sought to establish a legally binding contract. However, there is a subjective intent to agree.

In another example, a drunken man agrees to do some work around the house for someone in return for consideration. However, the other party doesn't know the man is drunk and believes the contract is legally binding. The drunken man only agreed to do the work because he wasn't sober and in the right frame of mind to make this decision. Applying only objective intent isn't good enough in this situation, so you must take subjective intent into account.

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