Contract Law - 1.3 - Intention to Create Legal Relations

Question 1

Intention to create legal relations

Answer 1

An intention to enter into an agreement that has legal ramifications.
Necessary requirements of a binding contract.

Question 2

Test of intention

Answer 2

The test of intention is objective
ie Actions not intentions.

Question 3

Commercial v Social/domestic agreements

Answer 3

Commercial - there is an intention to create legal relations

Social/Domestic - there is not an intention to create legal relations

Question 4

Commercial agreements

Answer 4

• Between businesses
• Between individuals and business
• “subject to contract”

Question 5

Subject to contract

Answer 5

Creates a strong inference that the parties do not intend to be bound until formal execution of a contract.
Subject to Contract -> not biding

Question 6

Social and Domestic Agreements

Answer 6

General presumption is that there is no intention to create legal relations.

eg Balfour v Balfour 1919

If agreement reached before breakdown in relationship occurs, courts are unwilling to find intention to create relations

Question 7

When are social/domestic agreements presumptions be ost likely to be rebutted

Answer 7

The usual presumption that familial agreements don’t have an intention to create legal relations may be rebutted in situations where agreements were made between spouses in the process of separating, or were separated.
Merrit v Merrit 1970

Question 8

Merrit v Merrit 1970

Answer 8

Spouses in the process of separating