A more thorough explanation:

The objective theory of contract is the idea that a contract is not just an agreement between two parties, but rather a series of actions that give the appearance of an agreement. This means that the intentions of the parties involved are not as important as their actions and the way those actions are interpreted by an outside observer.

For example, if two people agree to buy and sell a car, but one of them thinks they are buying a red car and the other thinks they are buying a blue car, the objective theory of contract would say that the contract is based on the external actions of buying and selling a car, rather than the internal thoughts and beliefs of the parties involved.

Another example would be if two people agree to meet at a certain time and place, but one of them is late and the other leaves before they arrive. Even though the two parties did not actually meet, the objective theory of contract would say that they had a contract to meet based on their external actions of agreeing to a time and place.

The objective theory of contract is important because it helps to ensure that contracts are enforceable and that parties can rely on them to protect their interests. By focusing on external actions rather than internal thoughts and beliefs, it provides a clear and objective standard for determining whether a contract exists and what its terms are.