Objective Theory of Contract Law and Legal Definition

Objective theory of contract is a doctrine which states that a contract is not an agreement in the sense of a subjective meeting of the minds. However, a contract is instead a series of external acts giving the objective semblance of agreement. This principle states that the existence of a contract is determined by the legal significance of the external acts of a party to a purported agreement, and not by the actual intent of the parties. American law had adopted the objective theory by the late nineteenth century. This doctrine is often shortened to and known as objective theory.