Intention to create legal relations Flashcards
What are the 2 rebuttal presumptions (assumption by court unless proven otherwise)
-In commercial agreements, there is a strong presumption that there is an intention to create a legal relationship
-In social and domestic arrangements, the parties do not intend the agreements to be legally binding
<they are followed unless they’re factors that permit them to be rebutted>
Commercial agreements
-Must be consistency and certainty as they often involve large sums of money
-strong presumption that there is an intention to create legal relations, this presumption can be rebutted if there’s strong evidence
Free Gifts
-These can be given in order to promote business.
-Such an agreement can still be held to indicate a legal relationship & mean that the promise is legally binding.
-It’s possible for a similar type of agreement not to contain an intention to be legally bound where it’s specifically stated in the agreement
What does statute make clear?
Statutes sometimes make it clear that contracts are not intended to be legally binding e.g S1 of the law reform(Miscellaneous Provisions) Act 1970
S1 of the law reform(Miscellaneous Provisions) Act 1970?
An engagement to be married is no longer deemed to be an agreement that can be enforced by law
Social and Domestic Agreements
Vast majority of social and domestic arrangements do not amount to contracts as they’re not intended to be legally binding. e.g if you agree to meet me for a coffee after work
3 main areas where S&D arrangements tend to arise
-Husband and Wife
-Children and Parents
-Other Social Arrangements
Husband and Wife
-Parties are left to themselves to sort out problems and the arrangements will usually not be held to be binding.
CL: Balfour v Balfour
Balfour v Balfour
The claimant’s claim failed; the agreement was a purely domestic arrangement and not legally enforceable
On the contrary, this principal can be rebutted if there’s evidence- Merritt v Merritt
Merritt v Merritt(rebuttal to BvB)
The court held that there was an intention to create a legally binding agreement between husband and wife.
Distinction between Balfour v Balfour & Merritt v Merritt
In Merritt, the agreement took place due to the marital breakdown, whereas in Balfour v Balfour the arrangements were made on the basis of an amicable agreement. Furthermore, Merritt shows that the courts will take all factors into account when deciding whether there was an intention to create a legal relationship
Children and Parents
Families can make contracts that appear to be formal, mainly due to character
-Courts need to look at the real purpose of the agreement, and it is this purpose that’ll determine whether or not the agreement is legally binding
CL: Jonas v Padavatton
Jonas v Padavatton
The agreement with regard to a house was so ambiguous as to be incapable of being a contract
Other Social Arrangements
-The presumption is against finding an intention to create a legally binding relationship but this can always be rebutted
-If money has changed hands then it won’t matter if the arrangement’s made socially and it can be held to be legally binding e.g Simpkins v Pays
-However, the presumption will not always be rebutted as was shown in Wilson v Burnett
Simpkins v Pays
A lodger refused to share winnings, claiming it was purely a domestic relationship. His defence failed and he was bound by the agreement
