Intent to Create Legal Relations Flashcards
Two main factors shape the court’s perception of the enforceability of contracts
1) The nature of the relationship (or the transactional setting) of the parties to the agreement.
2) The general impracticality of enforcing certain types of agreements
What are the two main settings often used to assess the intentions of parties in transactional dealings or relations?
transactional dealings or relations are often classed along two main settings—commercial settings and social settings.
what are commercial settings
When parties reach agreements in commercial settings, the general assumption is that the parties intend to create legal relations.
why is it assumed in commercial settings that parties intended to create legal relations
Parties in this setting typically enter agreements to achieve specific business or economic outcomes. If they don’t intend to create legal relations, they usually make this clear to avoid any implied intent.
One factor that may work against finding an intention to deal in commercial settings is
where the parties are yet to reach a formal contract or have described their agreement as ‘subject to (a formal) contract’
But the fact that contracting parties express themselves as contracting subject to a formal contract does not mean that
the court cannot yet find an intention to be bound
what is the assumption of contracts in social settings
The assumption is that clear factors indicating an intention to contract must be present for a legal obligation to be established.
what is the general background to the assumption under social settings that clear factors must be shown
The reason is that in social arrangements, such as circles of family, friendship, community and recreation, the general view is that parties do not intend that their agreements should be accompanied by an intention to create legal relations.
where would the general rule of social setting contracts not apply
where the totality of the facts or the substance of the arrangement between the parties demonstrate an intention to be bound for example aspects of marital arrangements, such as the allocation of property or other economic interests between the parties
what is a hybrid setting
parties dealing in a commercial setting intend their agreements to be governed by cultural norms
what is an exception to both the social and commercial and hybrid ideas
The courts may infer a lack of intention to create legal relations if enforcing the agreement is seen as impractical.
What happens when government agencies make policy-based agreements with private entities?
such agreements cannot generally be enforced against the government.
Estoppel doctrine
holds that a party can be stopped from doing something that is inconsistent with their previous actions or with a judicial determination that has been previously made
what are the three factors of forming a valid contract
a) an agreement (which is concord of an offer and acceptance)
b) consideration; and
c) intention to create legal relations
what is HOA - heads of agreement
usually a non-binding legal document that will record the key terms of an agreement between parties
