2. Intention to Create Legal Relations

Question 1

Intention to create legal relations: Commercial Agreements Presumption

Answer 1

Strong presumption that parties intended their agreement to have legal consequences

Question 2

Intention to create legal relations: Domestic Agreements Presumption

Answer 2

Presumption that parties did not intend to create legal relations

Question 3

DEF: Commercial Agreements

Answer 3

Agreements between businesses, between individuals and businesses, and between individuals not in business

Question 4

Rebutting Commercial Agreements Legal Relations Presumption: How?

Answer 4

Clear express statement that agreement not meant to be legally binding (eg. ‘binding in honour only’)

Question 5

DEF: Domestic Agreements

Answer 5

Agreements where parties are family members, close friends etc.

Question 6

Rebutting Domestic Agreements Legal Relations Presumption: How?

Answer 6

Looking at the facts
(1) husband and wife settling financial terms of divorce
(2) reaching a joint business venture
(3) selling houses between family members
NOT when relationship is VERY close and SUM is NOMINAL (eg. parent and child allowance)

Question 7

If a business gives products away for free, will the presumption of the intention to create legal relations still apply?

Answer 7

YES, because this is still in the course of business (Esso Petroleum v Commissioners of Customs and Excise)