Two approaches to contractual interpretation: Subjective and Objective
- A subjective approach to contractual interpretation would answer the question of whether a particular fact situation falls within the scope of a particular contractual clause exclusively on the basis of what the parties actually or subjectively intended.
- An objective approach to contractual interpretation would answer the question exclusively with reference to external factors which can be ascertained without taking into account the actual or subjective intentions of the parties.
This case exemplifies the problems associated with the subjective approach. Civil law countries are now gradually shifting away from the subjective approach.
FACTS
Contract between a Norwegian and a German company for supply of 200 tonnes of haaksjoringskod. This substance could mean shark meat or whale meat. When the German company entered into the contract, the German companyintended to import whale meat. However, the Norwegian company thought that the term referred to shark meat and exported it. German company refused to take delivery.
https://www.lawweb.in/2013/03/two-approaches-to-contractual.html