The Contract that Neither Party Intends
22 Pages Posted: 19 Jul 2012 Last revised: 29 Mar 2015
Date Written: July 18, 2012
This article responds to the observations of Heydon and Crennan JJ in the recent case of Byrnes v Kendle concerning, inter alia, the irrelevance of the subjective intentions of contracting parties. Their Honours endorsed the view of the well-known American judge and jurist, Oliver Wendell Holmes, expressed nearly 115 years ago concerning the objective approach to contract formation and interpretation: In particular, they suggested that the law of contract is primarily concerned with finding a correspondence of external signs, that the parties’ actual intentions are irrelevant except in ‘limited circumstances’, and that there can be a binding contract that neither party intends because it is only what the parties said that matters in the law of contract, not what they meant? The author discusses several reasons why this view of basic contract doctrine should be rejected.
Keywords: Contract Formation, Objectivity, Contract Interpretation
JEL Classification: K12
Suggested Citation: Suggested Citation