INTENT TO CREATE LEGAL RELATIONS CASES

Question 1

Fleming v Beevers FACTS

Answer 1

• A de facto couple bought a property in Queenstown as tenants in common (1/2 share each).
• They agreed to leave their respective half of the property to each other in their Wills.
• Mr. Beever died unexpectedly without amending his Will.
• Miss Fleming sued Mr. Beever’s estate for breach of contract, arguing that their promise to change their Wills constituted a contractual obligation.

Question 2

Fleming v Beevers HELD

Answer 2

THERE WAS INTENT TO CREATE LEGAL RELATIONS
- The parties took significant steps beyond mere preparation, indicating an intent to create legal relations.
- The quality of consideration may demonstrate the intention to establish a binding contract.

Question 3

Ashton v Pratt FACTS

Answer 3

• Ms. Ashton was an escort for Mr. Pratt, who promised her financial support in exchange for being his mistress.
• After Mr. Pratt’s death, Ms. Ashton sought to enforce the contract.

Question 4

Ashton v Pratt HELD

Answer 4

NO INTENT TO CREATE LEGAL RELATIONS
Relevant Factors Leading to No Intention in the Case:

• Family relationship between the parties.
• Lack of detail in the agreement.
  Informal language used in the agreement.
• Unspecified duration of the arrangement.
• Services provided by Ms. Ashton were contrary to legal policy.
• Overall significant lack of certainty in the agreement.

Question 5

Fletcher Challenge Ltd v ECNZ FACTS

Answer 5

Two large companies enter into negotiations to transfer shares in a gas field and a head of agreement was drafted.

Question 6

Fletcher Challenge Ltd v ECNZ HELD

Answer 6

head of agreement WAS NOT legally binding-
No enforceable contract existed because the heads of agreement were not consolidated into a proper contract.
- The parties were not ad idem (in agreement) on the terms, resulting in insufficient certainty for enforceability.
- The agreement constituted merely an “agreement to agree” in the future, pending further negotiations.

Question 7

Tower Insurance v Nicon Ltd FACTS

Answer 7

-Dispute involved Nicon (a demolition contractor in Christchurch) suing Tower Insurance.
- The case arose from claims related to damages sustained to numerous properties during the Christchurch earthquakes.

Question 8

Tower Insurance v Nicon Ltd HELD

Answer 8

head of agreement WAS legally binding
- The agreement was intended to have immediate effect and did take effect.
- The parties relied on the Head of Agreement (HoA), eliminating the need for a later contract.
- The HoA cannot be used to avoid legal obligations.

Question 9

Deng v Zheng FACTS

Answer 9

• Deng and Zheng had a long-term commercial relationship in property development and construction.
• They agreed to end their business relationship.
  Attempts to amicably separate their interests were unsuccessful, leading to litigation

Question 10

Deng v Zheng HELD

Answer 10

Appeal dismissed - Zheng won.
- Culture can play a significant role in contracts, but its relevance to determining intent varies by case.
- The social setting may explain the commercial context and help assess the intent behind a commercial relationship.
-The Supreme Court states that understanding the practices of a specific family or relationship is essential to determine intent, requiring evidence of how that family or relationship operates.