Intention

Question 1

Definition

Answer 1

Parties must have intention to create legally binding agreements for a contract to be valid, they must intend for the contract to be legally enforceable in court

Question 2

Business/Commerical settings

Answer 2

Agreements made between business and in commercial contexts will be legally binding because there is consistency with agreements being legally binding (Edwards v Skyways)

Question 3

Mere puff

Answer 3

Some offers include a competition or reward for entering an agreement, it is up the courts to decide whether it is a mere puff to entice or intention to be bound (McGowan v Radio Buxton)

Question 4

Clear words rebut

Answer 4

Where there are clear words, this will rebut a presumption
Honour clause- the honour pledge suggested this was not intended to be a formal or legal contract
Gentleman’s agreement- the term ‘in honours’ was clear language that there was no intention to give rise to legal obligations (Jones v Vernon Pools)

Question 5

Letters of comfort

Answer 5

Where a parent company provides assurance to a lender of a subsidiary, depending on the words and circumstances as it is unlikely to be a legally binding contract (Kleinwort Benson v Malaysia Mining Corp)

Question 6

Social/Domestic settings

Answer 6

Agreements made in social and domestic settings will not be legally binding because the promises are made from love and affection (Balfour v Balfour)

Question 7

Financial reliance

Answer 7

Where one party is financially reliant on another, the agreement will be legally binding (Parker v Clarke)

Question 8

Unclear relationships

Answer 8

The burden to prove an intention to create legal relations is on the party wanting to rely on the agreement (Blue v Ashley)