Intention to create legal relations

Question 1

Balfour v Balfour

Answer 1

Husband and wife agreed that the husband would send $30 to the wife each month - held an domestic agreement which has no legal intention

Question 2

Merritt V Merritt

Answer 2

The marriage was breaking up therefore there was a rebuttable presumption that there was no legal intention

Question 3

Jones V Padavatton

Answer 3

Domestic agreements between parent and child - there is a presumption that these agreements have no legal intention

Question 4

Webb V Webb

Answer 4

Father went through the legal process to change the name of the flat to his sons name, but was seen as having legal intention

Question 5

Jullian V Furby

Answer 5

court showed a willingness to compromise and agreed that there was a legal intention to pay for the materials used but not for the labour provided as it was seen as a domestic agreement

Question 6

Simpkin v Pays

Answer 6

social agreements - Gran and granddaughter made a deal with the lodger to share the winnings and it was held as having legal intention

Question 7

Parker V Clarke

Answer 7

Social agreement that has financial security at risk - seen as having legal intention

Question 8

Peck v Lateu

Answer 8

Legally binding as the two ladies had agreed to share any winnings from bingo and there was a clear intention to be bound by the agreement - bingo/lottery cases

Question 9

Wilson v Burnett

Answer 9

Not legally binding as Burnett’s evidence wasn’t satisfiable enough that there was a legal intention to share their winnings - bingo/lottery cases

Question 10

Coward v Motor Insurances’ Bureau

Answer 10

The court ruled in favour of MIB. The judge found that neither party intended to be legally binding. Mr Coward wasn’t a passenger who Mr Cole was under a duty to ensure and the MIB were not under any obligation to satisfy the judgement

Question 11

Albert v MIB

Answer 11

The court held in favour of the claimant. The obligation arose if the vehicle systemically carried passengers for reward for reasons beyond more social kindness. There was no need for binding contracts so long as the arrangement amounted to business activity

Question 12

McGowan v Radio Buxton

Answer 12

McGowan was tricked into thinking she has won a real car - was compensated for the humiliation and upset she faced

Question 13

Jones V Vernons Pools

Answer 13

Exceptions of the commercial presumption - contract stated that it was ‘binding in honour only’ no ITCLR due to the honour clause

Question 14

Weeks V Tybald

Answer 14

Mere puffs

Question 15

The objective test used in the ITCLR comes from which case?

Answer 15

Carlill v Carbolic Smoke Ball

Question 16

What is the reason for the ITCLR rule?

Answer 16

It would not be sensible for the courts to be filled with actions no all of the broken promises that are ever made We simply do not have enough courts and judges.

Question 17

The courts have developed two key guidelines for determining whether or not an ITCLR exists that would make the agreement enforceable. What are the two rebuttable presumptions?

Answer 17

-In the case of an agreement that is of a social or domestic nature it’s presumed that there is no ITCLR
-In the case of commercial or business agreements it is presumed that there is an intention to create legal relations and the agreement is legally enforceable

Question 18

What does ‘rebuttable’ mean?

Answer 18

Able to oppose by contrary proof/evidence - ie. you can prove that to the reasonable man the party did intend to be bound or did not

Question 19

What does ‘presumption’ mean?

Answer 19

An idea that is taken to be true/fact (unlike an assumption which is where you suppose something without any proof)

Question 20

What is a domestic agreement? and what is the starting point in these situations for courts?

Answer 20

Agreements made between family members and the court particularly dislike these types of cases being brought to court. Courts will have the presumption that there was no ITCLR

Question 21

What are the two cases which show domestic agreements between husband and wife, and how they are looked at by courts when deciding ITCLR?

Answer 21

Balfour v Balfour- no ITCLR as they were in a domestic relationship when the agreement was made
Merritt v Merritt - ITCLR as the marriage had fallen apart before the creation of the agreement

Question 22

What is the presumption of a domestic agreement between a parent and child? Give a case example:

Answer 22

Agreements of a domestic nature between parents and children are also presumed not to be intended to be binding, though the presumption can be rebutted: Jones v Padvatton

Question 23

What is the presumption of social agreements between other family members and friends? Give a case example:

Answer 23

The presumption that an agreement isn’t intended to be legally binding is also applied to social relationships, these are usually between other family members and friends: Simpkin v Pays

Question 24

What is a social agreement?

Answer 24

Social agreements are usually made between friends - people unrelated or family members not considered under the domestic agreements. There is a rebuttable presumption that there is no ITCLR

Question 25

What is the presumption of a social/domestic agreement when financial security is put at risk ie. there is a reliance? Give a case example:

Answer 25

If parties put their financial security at risk for an agreement ie. have acted in reliance on the promise then this alone is likely to rebut the presumption and ITCLR will be found: Parker v Clarke

Question 26

What is the presumption in Lottery/bingo cases? Give a case example:

Answer 26

When friends decide to share winning, such agreements are viewed in the first instance to be a social agreement by the courts for which there is a rebuttable presumption that the parties do not intend to create legal relations:
-Peck v Lateu: ITCLR
-Wilson v Burnett: no ITCLR

Question 27

In commercial agreements what is the presumption? Give a case example:

Answer 27

There is a strong rebuttable presumption that the parties do intend such agreements to be legally binding: Esso v Commissioners of Customs and Excise

Question 28

What do the courts aim to do in commercial agreements? Give a case example:

Answer 28

protect the individual citizen from larger businesses: McGowan v Radio Buxton

Question 29

What are the exceptions to the commercial presumption? Give an example and a case:

Answer 29

Where the words of a contract, or an offer, suggest that legal relations weren’t intended ‘in honour only agreement’ :Jones v Vernons Pools

Question 30

What is ‘mere puffs’ as an exception to the commercial presumption? Give a case:

Answer 30

refers to exaggerated or promotional statements that are not intended to be taken literally or as legally binding promises. These statements are often found in advertising and marketing, where businesses make grandiose claims to attract customers: Weeks v Tybald

Question 31

What are contracts that are ‘subject to contract’? Give a case:

Answer 31

agreements where the parties have indicated that they do not intend to be legally bound until a formal contract is signed. This phrase is often used during negotiations to make it clear that any preliminary agreements or discussions are not yet legally binding: Confetti records v Warner Music