Preview

Contract Law - Intention to Oontract

Good Essays
Open Document
Open Document
2437 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Contract Law - Intention to Oontract
Contract Law 1
Intention to Create Legal Relations
In order for a contract to be valid there must be intention to create legal relations.
Enright notes ‘the requirement of intention to create legal relations is a final doorkeeper in contract. It determines which agreements supported by consideration shall be covered by contract law and which shall merely be morally binding.’ This requirement was expressly stated for the first time in Heilbut, Symons & Co V Buckleton.
Friel notes that important as there are a great many agreements and arrangements that, though possessing many of the characteristics of contract, probably are not intended to attract legal consequences.
Intention to be legally bound operates on the basis of presumptions.
The test for intention is objective. The court will impute intention to create legal relations to the parties on the basis on external factors rather than on the workings of the parties’ minds.
Intention and Presumptions
There are two presumptions in this area: 1. There is a presumption that agreements between family members or friends are not intended to be legally binding. 2. There is a presumption that agreements which are made in a commercial context are intended to be legally binding.
Social and Domestic Arrangements
A close family of social relationship raises a presumption of lack of intention to create legal relations.
The seminal case, Balfour V Balfour involved maintenance payments to be sent home to his wife while he was working abroad. The court held that agreements between husband and wife are not intended to be legally binding.
The closer the blood relationship the more readily the presumption will be raised and the more distant the degree of blood relationship, the more likely the courts will infer an intention to be legally binding. This can be seen in Simpkins V Pays where an informal agreement between a landlord and his lodger, to enter into a weekly competition, held lodger entitled to share

You May Also Find These Documents Helpful

  • Better Essays

    A contract is an agreement between two or more competent parties in which an offer is made and accepted, and each party benefits. When we look to see if a valid contract has been formed we look at the formation of the contract i.e. offer, acceptance, consideration and Intention to create legal relationships. This is an integral part of contract law. In England and most civil law countries existence of a contract depends on a theory that parties intend to be legally bound. The rule dates back to 1919’s where the court dismissed that a husband can be enforced to pay a fixed amount of sum he promised his wife. The doctrine of intention focuses primarily on whether both parties intend to be legally bounded by a contract. This area of law has become increasingly important over the year especially when there is no clear indication or mirror image in writing that the parties have a contract in place. It’s a matter of policy otherwise commercial agreements won’t be enforceable and doing business without a contract in place will be difficult and will raise doubt/fear among parties to enter into a commercial agreement.…

    • 1191 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    The intention to create legal relations means that the agreements between parties will be legally binding and enforceable by law if things do not go as planned. Traditionally, a formal contract is formed (as mentioned before) by a way of a deed where all elements such as offer and acceptance, consideration and certainty are involved, and therefore, there is no doubt that there is legal intent. Other less formal agreements can be into three categories which are social and domestic agreements (i.e. a father promises his son to buy him a video game if he passes his exam); commercial agreements (i.e an employer promises his/her employee to raise his/her wages) and advertisements (i.e. a supermarket promising their customers to pay them the difference if their products are more expensive than other supermarket). As these agreements can be in verbal, written or implied form, it is often vague and unclear in whether the agreement is legally intent or a puff to attract people's attention. Therefore, the role of court is to identify the initial…

    • 1850 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Contract and Goods

    • 8844 Words
    • 39 Pages

    6. Parties to sale contract should not necessarily act in a commercially reasonable manner and good faith.…

    • 8844 Words
    • 39 Pages
    Satisfactory Essays
  • Good Essays

    Answer: The parties to do or not do a specific thing must base it on a mutual agreement. Parties who are competent to enter into a contract that will be enforceable against both parties must make it. The promise or obligation of each party must be supported by consideration. It must de for a lawful purpose the contract must not be illegal such as the unauthorized buying and selling of narcotics. The contract must meet certain formal requirements such as being in writing or under seal.…

    • 2514 Words
    • 11 Pages
    Good Essays
  • Good Essays

    In term of general rules family, social or domestic relations, the presumption is that a legal situation was not…

    • 1593 Words
    • 7 Pages
    Good Essays
  • Good Essays

    (2) Next, there are cases in which they clearly point out one or more specific matters on which they must yet agree before negotiations are concluded. (3) There are many cases in which the parties express definite agreement on all necessary terms, and say nothing as to other relevant matters that are not essential, but that other people often include in similar contracts. (4) At the opposite extreme are cases like those of the third class, with the addition that the parties expressly state that they intend their present expressions to be a binding agreement or contract; such an express statement should be conclusive on the question of their ‘intention.’” It is probably best that I do not copy and paste the entire excerpt. Thus, I will relay the essence of the rule in a couple of short…

    • 463 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    Parol Evidence Rule

    • 456 Words
    • 2 Pages

    4. Exception was when the language of the written contract was ambiguous, that made the agreement looked incomplete of explanation…

    • 456 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    4. The contract is created for legal activities: Contract are not binding or considered legally valid when they propose illegal activities or violate existing laws in anyway. (What are the four elements of a contract, 2010).…

    • 387 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Business and Law Cases

    • 3537 Words
    • 15 Pages

    Balfour v Balfour(256): At the time of the agreement, did the parties intend the arrangement to be anything more than a domestic agreement…

    • 3537 Words
    • 15 Pages
    Good Essays
  • Powerful Essays

    1. Mistake- VOID e.g. the parties were at cross purposes about the subject matter of the contract.…

    • 4307 Words
    • 18 Pages
    Powerful Essays
  • Powerful Essays

    Competition Act

    • 2028 Words
    • 9 Pages

    1. Whether or not such arrangement, understanding or action in concert is formal or in writing; or 2. Whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings;…

    • 2028 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Contracts I Outline

    • 1898 Words
    • 8 Pages

    - A legal contract only exists when there is an exchange – whether that’s a promise for a promise, performance for a promise, etc… this is called consideration. The promises/performance have to be influencing the other party to act/promise. *i.e. the ‘fuzzy coughdrop’ rule*…

    • 1898 Words
    • 8 Pages
    Good Essays
  • Good Essays

    balfor

    • 10235 Words
    • 41 Pages

    Agreements between husband and wife over matters that affect their daily lives are not subject to contractual interpretation, even when consideration is present. Spouses normally intend that the terms of their agreements can be varied as situations develop. The court held that it was presumed that the parties made the agreement as husband and wife and did not intend that it could be sued upon. The court held that as a matter of public policy it could not resolve disputes between spouses.…

    • 10235 Words
    • 41 Pages
    Good Essays
  • Good Essays

    Element of Law

    • 1584 Words
    • 5 Pages

    Secondly, if there is no intention to create legal relations, the contract would not be enforceable, legal and binding. Intention to create a legal relation is one of the essential elements of contract. So, if there is no intention to create a legal relation, the contract can be assumed as a not legal (“Intention”, n.d.). Due to that, the contract may not being enforceable because there is no intention to create legal…

    • 1584 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Boger Rendands

    • 962 Words
    • 3 Pages

    The law will only recognise contracts where there is an intention to be legally bound by said contract, contracts of a domestic or social nature will have the presumption that both parties do not have the intention to create legal obligations, furthermore contracts of a commercial or business nature will have the presumption that both parties do intent to create legal obligations.…

    • 962 Words
    • 3 Pages
    Good Essays

Related Topics