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The Judicial Regulation of Improper Bargaining and of Violations of Law and Public Policy


The discussion of the objective test of assent in section 4.1 stressed that although contract is based on consensus, the law does not require a genuine subjective “meeting of the minds.” The focus is on apparent assent, as it would reasonably be perceived by one party from the manifested words and actions of the other. This has to be the general rule, otherwise no one could ever rely on overt indications of assent, and the one party’s reasonable expectation of agreement could be defeated by a showing that the other really did not mean what those indications reasonably conveyed.

  The principal purpose of the objective test is therefore the protection of reasonable expectations. Although a consistent and unbending application of the test would have the merit of certainty, it could lead to great injustice. For example, Lilly Livered signed a memorandum of agreement to sell her casino to Attila “The Animal” Axehacker. She agreed to the sale because Attila shoved the muzzle of his revolver up her left nostril and indicated his intent to pull the trigger if a signature was not immediately forthcoming. No doubt the signature is a first-class manifestation of assent, but no judge (except for Judge “Greasy” Palmer, who was seen taking a brown paper bag from Attila the other day) would hold Lilly accountable for the reasonable import of her conduct. Not only should she not be held accountable for a manifestation of assent forced out of her, but Attila was responsible for undermining her free will and cannot legitimately claim that he relied on her assent being volitional. That is, a rigid focus on Lilly’s manifested assent—her signature—would serve neither justice nor the goals of contract law. Policing doctrines allow the court to go behind the appearance of assent in cases like this, in which the process of contract formation is tainted by improper bargaining behavior. The policing doctrine applicable in this particular example is duress because Attila induced Lilly’s apparent assent by illegitimate threat. Other facts may satisfy the elements of one of the other doctrines discussed below. As a general observation, it can be said that all the doctrines are safety valves for the objective test, so that it cannot be used as a tool of oppression, deceit or advantage-taking.

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