Final answer:
Courts look to objective manifestations, such as written agreements and verbal statements, to determine whether a contract has been formed, with an emphasis on what a reasonable person would believe those actions meant.
Step-by-step explanation:
In determining whether a contract has been formed, courts primarily look to objective manifestations of the parties' intent. This means that the actual words and actions that the parties have expressed are taken into consideration, rather than their internal, subjective intentions. Courts analyze things like written agreements, verbal statements, and conduct during negotiations. The main focus is on what a reasonable person in the position of the parties would believe those actions and statements meant. While subjective manifestations or the internal intent of the parties may be of some interest, especially when resolving issues related to fraudulent behavior or misrepresentation, it is the objective evidence that typically determines the existence of a contract. The reasoning behind this is based on the necessity to have a clear standard that can be applied uniformly across cases, as opposed to the possibility of varying individual interpretations of intentions. This approach reflects the reality of how contracts operate in a consistent and predictable manner within the legal system.