THE THREE THEORIES

Question 1

THE WILL THEORY:

Answer 1

is a subjective approach which states that actual consensus is the basis of contractual liability and therefore a contract will fail when a mistake is present.
-requires a genuine meeting of the minds.

Question 2

THE DECLARATION THEORY:

Answer 2

is an objective approach that states that external manifestations of the parties’ will, that is their words and conduct, is the basis of contractual liability, and therefore a contract will stand when a mistake is present.

Question 3

THE RELIANCE THEORY

Answer 3

is a subjective-objective approach that states that the reasonable belief of the existence of consensus, according to a reasonable person, is the basis of contractual liability and the reasonableness of the belief will determine whether a contract stands or fails when a mistake is present.

Question 4

APPLICATION OF THE RELIANCE THEORY:

Answer 4

a. on application of the will theory there is dissensus.
b. apply reliance theory to determine the reasonable reliance:
-contract denier misrepresented his contractual intention?
-contract asserter relied on the misrepresentation?
-contract asserter’s reliance was reasonable?