Discuss the extent to which the rules on intention to create legal relations are in need of reform Flashcards
How does the court usually determine if a party intended to create legal relations or not
The court will look at whether the arrangement was a business arrangement or a domestic arrangement
What are the relevant cases for domestic agreements
The most usual distinction can be seen in Balfour v Balfour and Merritt v Merritt. The difference being that in Balfour and Balfour it was domestic because the agreements was made before they were divorced whereas in Merritt and Merritt the agreement was made after the breakdown in their relationship so it was a business agreement
What was the significance of the Jones v Padavatton case
It was decided that the agreement was a domestic one between two family members and the lack of formality regarding the agreement between the mother and daughter strongly indicated there was no intention to create legal relations.
What are the 3 ways in which you can rebut a claim being domestic
The first is where the parties aren’t contracting on a domestic basis as shown in Albert v motor insurers (this was a business agreement) and Snelling v Snelling (this wasn’t a business agreement). The next way is if the relationship has broken down as shown in Merritt v Merritt. The next way shown in Parker v Clark is when there has been reliance on a contract.
What is the presumption in commercial cases
It is presumed that the parties are legally bound as shown in Carlisle and Carbolic smoke ball company. The commercial presumption can also be rebutted if there are clear words that they don’t want to create legal relations as shown in Jones and vernons pools
Can a pre contractual statement give legal relations
A pre-contractual statement that doesn’t create a clear promise won’t create legal relations case is klinewort benson and Malaysia mining
What are the reforms for all of this
-even if there is a domestic assumption if consideration is still involved then that is still contract but the current law states it isn’t
-You could make the argument that the domestic agreement is outdated because couples are more likely to make business agreements nowadays and prenups are also legally standing so why aren’t other agreements legally standing
-This presumption that there is no legal intent does it give protection to the legal parties for example if they then fall out after the agreement
-If we were to give all these things legal standing then that could be a waste of the courts time
-If you have two businesses negotiating the contract is the ability to exclude words to protect legal intent in the parties interest
-Whether the words could be used by economically dominant company to actually avoid liability
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