QUESTION FIVE

‘[Contract] law…repeatedly makes reference to the parties’ intent – speaking of the “intention to be bound” as an important component of the formation process, or of the “intention to create legal relations” as an essential ingredient of a contract. “Intention” in these contexts does not refer to what a party may have actually meant or indicated: in contract law, we almost never try to assess a party’s actual intention. It refers, instead, to something objective – specifically, to what a reasonable person would have understood as the import of what the party said or did. If a party’s intention in saying or doing certain acts was not what a reasonable person would have inferred, the court will give effect to what the reasonable person would have inferred, not what the party intended.’

 

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TT Arvind, Contract Law (2019, OUP, 2nd edn.), 22.

 

With reference to relevant case law and other materials, explain and critically analyse the above quotation and the area of law to which it relates.

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