Chapter 3: Intention to create legal relations

Question 1

What is the presumption on intention in terms of commercial agreements?

Answer 1

That the parties intend to create legal relations. The onus to rebut this is heavy and depends on the wording used

Question 2

What does ‘subject to contract’ mean?

Answer 2

The parties do not intend to be bound until the formal execution of a contract

Question 3

What is the presumption on intention in terms of social and domestic agreements?

Answer 3

That the parties do not intend to create legal relations. The court will look at the circumstances of the arrangement