Contract Law- Intention for legal relations

Question 1

define intention under contract law

Answer 1

Where a party has entered into a legally binding contract with the intention to sue

Question 2

What is the presumption in a domestic agreement ?

Answer 2

The presumption in social/domestic agreements is that there is no intention (no contract)

Question 3

Why do courts presume there is no intention between social/domestic agreements as a starting point and what does social/domestic mean ?

Answer 3

Its a starting point because the courts time should not be taken up with trivial cases or squabbles amongst friends

social agreements are between friends, work colleagues, neighbours etc.

Domestic agreements are between family members

Question 4

What was held in the case of Balfour V Balfour and the POL

Answer 4

Held: There was no intention to be legally bound because they were married and together when agreement was made

POL: Couples make agreements all the time to get on with their daily lives, it is purely a domestic agreements and lacked intention to create legal relations

Question 5

In contrast what was held in the case of Merritt V Merritt and the POL in that

Answer 5

Held: There was a contract, there was legal intent as they were separated when agreement was made and it had been written

POL: there is intention if they are separated and/or in writing

Question 6

In the family case of Jones V Padavatton what was held and what was the POL

Answer 6

It was held that there was no contract as it was a domestic arrangement and mum could repossess the house. There was a for and against for intention as the daughter had given up something (her job) but the presumption on no intention in domestic agreements prevailed

POL: Family = no intention

Question 7

What was held in the case of Parker V Clarkes and the POL

Answer 7

Held: There was a contract, they could not do this, intention was shown by Parker’s giving up their financial security (house) - all on reliance of the promise that they would eventually own the Clarke’s house and Mr Clarke altering his will showed that he expected to be legally bound by the agreement

POL: If you rely on a promise and act on it there is intention

Question 8

What was held in the case of Snelling v Snelling and the POL

Answer 8

There was a contract, this was a commercial agreements so starting point is that there is intention to be bound, the fact that they were brothers became irrelevant

POL: If family members in business together = intention

Question 9

In a case involving friends what was held in the case of Buckpitt v Oates

Answer 9

Starting point= No intention
it was held there was no contract
POL: Shared lifts and shared money = no intention

Question 10

What does rebutting mean and why does the case of Albert V MIB contrast to Buckpitt

Answer 10

Rebutting= proving something false

It was held that there was a contract, the difference between this and Buckpitt is that it was a well-established agreement with established set-out payments. One driver, not shared driving. He was basically acting as a taxi service therefore the presumption was ‘rebutted’ because the agreement had become commercial over time

POL: One driver who is paid = intention

Question 11

What was held in the case of Wilson V Burnett

Answer 11

Held: No contract, COA said that ‘casual conversations’ cannot be binding agreements, this shows courts reluctance to get involved with social agreements

POL= casual conversations = no intention

Question 12

What was held in a contrasted case ‘Simpkins V Pays’ and the POL in it

Answer 12

Held: There was a contract despite the competition having been entered into a social setting, money was involved and this created legal intention

POL: Regular arrangements with shared money = intention

(difference between this case and Wilson case is that that was a ‘one-off’ casual chat before a night out whereas this was a regular arrangement)

Question 13

What is the presumption in a commercial agreement

Answer 13

The presumption is that there is intention.

The party who don’t want a contract has to rebut the presumption by proving no intention exists

Question 14

What was held in the case of Carlill

Answer 14

POL: Adverts promising a reward = intention
It was held that there was intention because they showed the intention to be bound by depositing an amount in the building society ‘to meet any claims’

Question 15

What was held in the case of Esso v Customs

Answer 15

POL: Promotions giving away some sort of collectable in return for a sale = intention

It was held there was intention because there was ‘commercial gain’ and customer expected to receive a coin even though it wasn’t worth anything

Question 16

If the business uses very clear wording that makes it clear there is no intention then the courts will accept this, aka ‘gentlemen’s agreements’ or ‘honour-bound agreements’
give cases to support this

Answer 16

Jones V Vernon’s Pools
POL: Clear wording negating intention = no intention
Held: No contract as it was made very clear it was binding in honour only

Rose and Frank Co V Crompton
Held: The wording was enough to rebut the presumption of intention. No contract

Question 17

In relation to letters and wording, what case could you use ?

Answer 17

Kleinwort V Malaysia Mining Corp
POL: comfort letter (a letter prepared by an accounting firm which reassures another about the financial soundness of a company) = No intention

Held: Comfort letters are not binding, letter was simply an honest representation of M’s policy at the time

Question 18

What is a case contrasted to the above

Answer 18

Edwards v Skyways
POL: using the words ‘ex gratia’ (out of goodwill) is not enough to prove no intention

Held: The agreement ‘suggested’ a legal intention to pay; words ‘ex gratia’ were irrelevant

Question 19

What happened in the case of Sadler V Reynolds

Answer 19

It was in between a business/domestic agreement
Held: Judge suggested agreement fell ‘somewhere between an obviously commercial transaction and a social exchange’

burden was on journalist to prove there was intention ,he couldn’t thus there was no contract.

when there is an inbetweener courts usually look for social agreement, they start with presumption there is no intention.