Intention

Question 1

There are 2 presumptions for intention. What two situations do these come under

Answer 1

Business/Commercial

and

Social/Domestic

Question 2

There are 5 exceptions for commercial agreements. What are they?

Answer 2

Vague language

Extravagant Language

Honour Clauses

Where agreements are “Subject to Contract”

Collective Bargaining Agreements

Question 3

What approach do the courts take to intention? What do they compare it to?

Answer 3

What would the reasonable man think that the parties intended, not what they say they intended?

Question 4

Rose and Frank v Crompton Brothers [1924]

Answer 4

Facts: The parties entered an agreement with an honourable pledge clause saying it was not binding. The contract was breached

Held: The pledge clause overruled the presumption of intention that typically exists in commercial contracts

Question 5

Edwards v Skyways [1964]

Answer 5

Facts: Edwards worked as a pilot and was made redundant. Skyways said if Edwards withdrew his contributions to the company pension fund, they would pay him the equivalent in ex gratia payment. Edwards agreed and withdrew his contributions. Skyways did not pay

Held: The agreement was legally binding because it was a business contract

Question 6

Jones v Padavatton [1969]

Answer 6

Facts: A mother offered to pay her daughter an allowance and bought a house she could use while the daughter studied in England to read for the Bar Exams (which she failed)

Held: There was no intention and no contract. It was a family arrangement based on trust

Question 7

Simpkins v Pays [1955]

Answer 7

Facts: The parties agreed to entire prize competitions sharing the cost of entering and any winnings. Pays won but refused to share the winnings

Held: It was a binding agreement. There was an expectation from both parties from the beginning that any winnings would be shared equally

Question 8

Esso Petroleum v Customs and Excise Commissioners [1976]

Answer 8

Facts: Esso was giving away a world cup commemorative coin for customers who bought 4 gallons of petrol. Customs and Excise Commissioners argued that tax should be paid on these coins

Held: No tax should be paid. There was a promise to customers with the intention of increasing petrol sales

Question 9

Jones v Vernons Pools [1938]

Answer 9

Facts: Jones filled in two winning entries on coupons for a sales promotion and sent them to Vernon Pools. The coupons contained the words “binding in honour only”. Jones claimed that the coupon entry was a contractually binding arrangement and that he was entitled to the prize money

Held: Honour clauses negate intention

Question 10

Ford Motor Co v Union of Engineering and Foundry Workers [1969]

Answer 10

Facts: A collective bargaining agreement was made regarding employment conditions. A union strike took place and the company brought an action for an injunction saying the agreement should be binding

Held: The agreement did not contain express provisions concerning their binding effect. The commercial context of the agreements is outweighed by their wording and nature

Question 11

Wilson v Burnett [2007]

Answer 11

Facts: 3 women won £100,000 and it was said they had agreed to split any prize over £10 between them. Burnett admitted she had discussed this idea with the other two, but argued that no agreement had been reached

Held: There was not enough evidence to suggest she would share the money; there had been no formal agreement

Question 12

Balfour v Balfour [1919]

Answer 12

Facts: A husband agreed to send his wife £30 per month. When the parties separated, the husband stopped paying and the wife sought to enforce the arrangement

Held: This was not a binding agreement. It was based on trust and honour between lovers

Question 13

Merrit v Merrit [1969]

Answer 13

Facts: A husband agreed to pay his ex-wife £40 per month in order to pay off the outstanding mortgage. It was understood he would transfer the house into the wife’s name but he later refused

Held: The couple had already separated so did not rely on trust and honour. It was a binding agreement

Question 14

What is the presumption for business and commercial agreements?

Answer 14

They are legally binding and there is intent to create legal relations

Question 15

What is the presumption for social and domestic agreements?

Answer 15

The parties do not intend for their agreement to become a contract and have legal consequences

These agreements are based on trust and honour

Question 16

Social and Domestic agreements

When can the presumption of lack of intent be rebutted?

Answer 16

based on the particular facts and circumstances of the parties