Intention to create legal relations Flashcards
What are intentions to create legal relations
the parties to a contract expressly or impliedly agree that the contract is legally binding and therefore enforceable by the courts
Business agreements
- presumption that the contracts are legally binding
Jones v Vernons pools: a betting receipt that stated that the transaction if you won was to be ‘binding by HONOUR only’. Not entitled to the claim as the court decided that the contract was not legally binding but instead based on honour
A free gift
Esso v commissioners of custom= a free gift can be considered as having intention to create legal relations where it can be shown that the business was trying to gain more revenue from it
Prizes offered at competitions
McGowan v Radio buxton = C entered a radio competition and was told they would win a Renault Clio however they were sent a toy car. Intention to create legal relations as they were gaining business from the running of the competition
What is a letter of comfort
A written assurance usually written from a parent company stating they give assurance to a party that the company they own will repay a loan however they themselves have no obligation to pay
Kleinwort Benson v MMC
Metals (subsidiary of MMC) borrowed 10 million from Kleinwort. MMC sent a letter of comfort to Kleinwort stating they would ensure metals had enough funds to repay the loan. Metals went bust however MMC was not responsible for paying back the loan as the letter of comfort did not create legal relations
Sadler v Reynolds
A journalist and businessman were friends and the journalist wanted to ghost write the autobiography of the businessman. This relationship falls in between social and commercial exchange
Burden of proof falls onto the journalist to show it was a business agreement not a domestic one
Domestic arrangements
Presumption that there is NO intention to create legal relations however this presumption can be rebutted as seen in the distinction between
- Balfour and Balfour
- Merrit v Merrit
Balfour and Balfour
Husband worked abroad. Wife lived in England. promised her an income of £30 a month. They then divorced and claimed for her £30 a month. It was made when they loved each other and not in contemplation of a divorce therefore NO intention to create legal relations
Merritt v Merritt
Divorced. However they had an agreement to pay the wife an income if she paid the outstanding mortgage and this was considered to hold intention to create legal relations and was therefore enforced by the courts
Jones v Padavatton
Mother persuaded daughter to move to England to study law and promised to allow her to stay in her house. Several years later the daughter hadn’t passed the law exams. Mother and daughter fell out and mother wanted to evict daughter. Daughter argued that there was a contract
- At the time for which the contract was made they loved each other and therefore the courts were satisfied that initially there was no intention to create legal relations
Simpkins v pays
A lodger and tenants entered a competition paying equal contributions they won but didn’t share the winnings their actions was more than just a social arrangement
