Goal agreements are agreed between two parties, but targets are set unilaterally by the employer as part of its management rights. [6] The commission and the target agreement include variable performance pay, which is paid in addition to a fixed salary. However, individual compensation related to the performance of the commission is intended for employees who are not or will not be primarily employed in sales, or for whom, in any case, a sales or result service is not primarily provided. If the employer takes a target where only the commission is paid on performance, this is a target agreement. Various methods can be used for the determination of the target. An effective tool is the Balanced Scorecard. To achieve the objectives, it is important to check that it is transparent to the employee and perceived as fair. [10] Some legal experts believe that more importance should be given to the subjective approach to contract law. Limiting the drafting of contracts to objective intent alone may unreasonably restrict the formation of contracts. However, this approach has its positive and negative effects. If the subjectivity of intent plays a more important role in determining the applicability of a contract, it will broaden the scope of the contracts to be drawn up and not limit them to forming solely on the basis of objective intentions. As such, it can facilitate the creation of real contracts.

The main differences between the two theories arise when a party claims that it did not intend to conclude the agreement. For example, Party A owns a $20,000 car. Its neighbor, Party B, asks Party A for the amount of money that Party A would be willing to sell the car. Party A, who does not intend to sell the car and knows that Part B cannot afford $20,000, says, « I would sell it to you for $1,000. » Part B says, « OK, that`s a deal. » Party A explains that his offer was not serious and that he never intended to sell the car for this amount of money. Nevertheless, a court could find that Parties A and B had entered into a binding agreement – the sale of the car for $1,000 – if a reasonable person in Party B`s position had believed that Party A intended to enter into such an agreement. However, if Party A told Party B that it would sell the car for $5, a court might be more likely to find that a reasonable person would not have believed that Party A intended to be related. Under a subjective theory of the contract, Party A could challenge the formation of a contract by providing evidence that it did not intend to be bound by its statement (i.e., the selling price of $1,000 or the selling price of $5). The introduction and sustainable implementation of a system of target agreements is associated with high expenditure. Framework objectives must be defined and a comprehensive company-specific approach must be developed. Employees need to be informed and involved. Even managers and the board may need to be informed and involved in the process. In addition, managers must be trained in their new responsibilities.

It therefore takes not only a lot of capital, but also enormous resources in time to establish a system of agreeing goals and sustainably. It is a meeting of heads with a common intention and is done by offer and acceptance. Agreement can be shown from words, behaviors and, in some cases, even silence. Since the end of the 19th century, this legal concept has become the norm for determining the intention of the parties in an agreement. Objective contract theory replaces the previous standard, known as subjective contract theory or « meeting heads, » which was commonly applied in the early 1800s. Therefore, the main determinant of the validity of a contract is the external actions or services of the parties, not the internal mindset or intent of the parties that exist in the agreement. SUBJECTIVE AGREEMENT: The subjective approach of contract law refers to a legal theory that defines a contract as an agreement in which there is a subjective agreement of opinions between the parties involved. In applying this approach, the court will consider the subjective expectations and expectations of the parties and ignore the objective wording of the contract. However, some courts and commentators have rejected this theory, preferring the objective approach instead.

From a legal point of view, intent can be defined as a person`s state of mind when performing an action or behaving in a certain way. This is the purpose or reason for a sequence of activities that the person wants to follow. The other party must understand the words or actions as the previous part intended to understand them. However, this is not always the case. Sometimes there may be misunderstandings resulting from certain factors, such as: 1) Wrong word choice. 2) Misunderstood or otherwise understood materialization of intent. 3) Intentionally hide secrets. There are many such cases where there is an agreement to follow a certain course of action, but there is no intention to be legally bound by it. .