The existence of an agreement depends upon the intention of the parties, who must be ad idem. It may be inferred from the language used, the parties conduct having regard to the surrounding circumstances and the object of the contract. The court will generally apply an objective or reasonable test.' With reference to relevant authorities, 

Discuss the above statement as to the circumstances and conditions that the courts will take into consideration when deciding whether there is a binding contract between disputing parties. 

Consider among others, arrangements made 'subject to contract' or 'subject to the preparation and approval of a formal contract'.