CONTRACT LAW — Agreement — Existence of — Objective Test
Ratio Decidendi
Per Mukhtar, JSC, in Ajagbe v. Idowu (2011) NLC-123-271-2003(SC) at pp. 10—11; Paras E—A:
"The existence of an agreement is not an issue merely of fact, to be found by a psychological investigation of the parties at the time of its alleged origin. English law takes an 'objective' rather than a 'subjective' view of the existence of agreement and so its starting-point is the manifestation of mutual assent by two or more persons to one another 'agreement is not a mental state but an act, and as an act, is a matter of inference from conduct. The parties are to be judged, not by what is in their minds, but by what they have said or written or done.'"
Explanation / Scope
This principle establishes that the existence of an agreement is determined objectively, not subjectively. The court infers agreement from the parties’ conduct, words, or writings, not from their mental states. The principle applies where the existence of an agreement is in issue. It ensures that agreements are determined objectively. The principle reflects the objective theory of contract. It prevents parties from denying agreements based on subjective intentions. The court must apply the objective test. The principle provides guidance on determining the existence of an agreement.