Intention to create legal relations Flashcards
What is the aim of creating legal relations?
The requirement of intention to create legal relations in contract law is aimed at sifting out cases which are not really appropriate for court action
Before contract is formed, must be proven there was intention to create a legally binding contract
How do the courts determine if intention exists?
To determine which agreements have intention to create legal relations, the court draws a distinction between social and domestic agreements and agreements made in a commercial context
What is the presumption about social/domestic agreements?
They are not intended to be legally binding
Held of case for domestic agreements - 1
Jones v Pavadatton
The agreement was purely domestic which raises a presumption that the parties do not intend to be legally bound by the agreement
Held of case for domestic agreements - 2
Balfour v Balfour
The alleged agreement did not constitute a legal contract, but was only an ordinary domestic arrangement which could not be sued upon.
Mutual promises made in the ordinary domestic relationship of husband and wife do not of necessity give cause for action on a contract
Held of case for social agreements
Wilson v Burnett
The court did not find intention between three work colleagues who played bingo together one evening
Why are contracts so important?
- Protects the assets of the parties involved
- Once a valid contract is made, it is legally binding and therefore legally enforceable - consequences for whoever has broken the contract
Presumption of commercial contracts
Presumption in favour of intention to create legal relations - some exceptions
Case and held for commercial contracts?
McGowan v Radio Buxton
- Answers quiz question, told she’s won a car, radio station gives her a toy one
- McGowan sued and RB was ordered to pay £8,000 for the real vehicle
Exception of commercial agreements - and case - 1
Honour clauses (not a formal or legal agreement)
Rose & frank co v Compton Bros - The honourable pledge clause rebutted the presumption which normally exists in commercial agreements that the parties intend to be legally bound by their agreements.
The agreement therefore had no legal affect and was not enforceable by the courts
Exception of commercial agreements - and case - 2
Jones v Vernon Pools
C was not entitled to recover his winnings because the agreement was based on the honour of the parties - thus not legally binding
Exception of commercial agreements - and case - 3
Chillingworth v Esche
- E agrees to buy land ‘subject to a proper contract to be prepared by vendors solicitors & pays deposit
E does not proceed with the sale, C sues
HELD - No contract, court orders that E can recover his deposit
