Question

15.The objective theory of contracts refers to the fact that in determining whether a valid offer exists, the court will mainly consider whether:

		(A) The offeror and offeree were acting in a calm, reasonable, unemotional manner.
		(B) The intentions--both obvious and unobserved--of the offeror and offeree match their       actions.
		(C) The offer would seem fair from the perspective of a prudent and reasonable person.
		(D) A reasonable person, observing the situation, would believe a genuine offer had been        made.

Answer 1

The objective theory of contracts states that an agreement would be considered legally binding if a reasonable person, not a party to the contract, provides an opinion that an offer and acceptance was made. Hence, the judges would be referring to an agreement as a contract when the offer seems fair from the perspective of a reasonable or prudent person. Therefore, the correct option is (C). All other options are wrong. None of them fulfills the condition of the objectivity of the contract.