Intention to create legal relations

Question 1

definition of a contract

Answer 1

an agreement that the law will enforce - legally binding

Question 2

decided objectively

Answer 2

the courts look at the facts and decide whether it was reasonable to presume that the parties intended the agreement to be legally binding

Question 3

business or commercial agreement

Answer 3

the presumption parties DO intend to create legal relations

Question 4

social or domestic agreement

Answer 4

law presumes that the parties DO NOT intend to create legal relations

Question 5

a presumption…

Answer 5

will be believed to be true in the court unless the D can prove otherwise.
These presumptions are rebuttable

Question 6

presumption can be rebutted by..

Answer 6

very clear wording which states that they did not intend it to be legally binding - Jones v Vernon Pools

Question 7

Edwards v Skyways (business/commercial)

Answer 7

negotiations had taken place about rights + payments to redundant airline pilots. Skyways tried to avoid making the agreed ex gratia payment in Edwards redundancy- tried to say that it wasn’t a legal requirement to pay.
This failed because , while ex gratia suggests voluntary payment with no liability the agreement was seen as a business agreement

Question 8

ex gratia

Answer 8

this means - without admitting the payment was a legal requirement

Question 9

Jones v Vernons Poole
(business/commercial)

Answer 9

Mr Jones claimed he had winning football pool coupon. The coupon which he signed, stated that the transaction was ‘binding in honour’ only - as the agreement was based on other parties
Not legally binding, there was no intent to create legal relations + no legal contract

Question 10

McGowan v Radio Buxton
(business/commercial)

Answer 10

C entered a radio competition - the prize was stated to be a Renault Clio car. The winner was given a 4 inch model Renault Clio. Radio Buxton argued there was no intent to create legal relations.
The court decided that there was a legal intention

Question 11

Esso petrol Co. v Customs+Excise

Question 12

Wilson v Burnett
(social/domestic)

Answer 12

3 young women worked together - they attended bingo session where one of them won a local prize of £153 and an national prize of £100,000.
They wanted to share the winnings on the basis that they asked one of them ‘If they’d share after winning the local prize’
A intention to create legal relationship didn’t exist at the time, so the claim to share failed

Question 13

Parker v Clarke
(social/domestic)

Answer 13

a younger couple were persuaded by an older couple to sell their house to move in with them, with the promise that they could later inherit the property when they died. Later, the couples fell out + the young couple the young couple were asked to leave.
The young couple successfully argued that they had a legally binding agreement. Giving up their security indicated the arrange,ent intended to be binding.

Question 14

Simpkins v Pays
(social/domestic)

Answer 14

a lodger + two members of the household entered competitions. The lodger filled in the form in the landlords name, one of the entries won. The claim was made by the lodger on the basis there was understanding that they would share any winnings.
Their action succeeded as this was more than just a social agreement.

Question 15

Balfour v Balfour
(social/domestic)

Answer 15

the agreement wasn’t binding as it was a domestic agreement made between an amicable married couple + they were no longer amicable or married. Mr Balfour worked abroad - promised her an income of £30 per month, the marriage failed + she petitioned for divorce but claimed the monthly payments

Question 16

Merritt v Merritt
(social/domestic)

Answer 16

Mr Merritt had left his wife.
An agreement to pay the wife an income if she paid the outstanding mortgage was held to be intended to create legally binding obligations and the court enforced it.