2.4-2.5: Intention to Create Legal Relations & Privity Flashcards
What is meant by intent to create legal relations?
People make agreements all the time that fulfil the other elements of contract law but they did not intend to be legally bound by this, therefore the courts say for it to be enforceable they must have intended this
What is the presumption in social and domestic agreements and what case shows this?
Balfour v Balfour, presumed the parties did not intend to be legally bound unless they can prove they did (rebutting the presumption)
What are the three examples and cases where social/domestic agreements have been rebutted?
When the agreement was made after the married couple had split (Merritt v Merritt), where money has exchanged hands (Simpkins v Pays) and where a party puts their financial security at risk (Parker v Clarke)
What is the presumption in commercial and business agreements and what case shows this
Esso Petroleum v Customs & Excise Commissioners, assumed the parties did intend to create legal relations, unless they can rebut this
When can a business/commercial agreement be rebutted and what cases show this?
Where the wording indicated no intent to create legal relations (Jones v Vernon Pools) or where the words are too vague/its a comfort letter (Kleinwort Benson Ltd v Malaysian Mining Corporation)
What is privity?
If you are not a party of the contract you cannot sue or be sued under it
What two cases demonstrate privity?
Tweedle v Atkinson & Dunlop Pneumatic Tyre Co v Selfridge and Co
Which act gives an exception to the rule on privity?
Contracts Rights of Third Party Act 1999
What are the two exceptions under the act?
Where a clause names the third party who would be entitled to sue, where the third party expressly identified in the contract and it purports to confer a benefit on them
When will the CRTP act not apply?
Where it appears the parties did not intend it to be enforceable by a third party and rights can be expressly excluded
What is meant by agency?
A person (the principal) can authorise another (the agent) to enter in a contract on their behalf, principal will be bound
What is a special case?
Contracting party can sue on behalf of another who was intended to benefit from the contract in certain categories of case which may be given special treatments, e.g. booking holidays for a group
What is a restrictive covenant?
Landowner agrees in a property sale not to do something on the land and this runs with the title and future owners
