Intention to create legal relations

Question 1

Intention to create legal relations

Answer 1

For an enforceable contract the rights and bargains must be of a nature that the courts think is enforceable

Question 2

Social settings

Answer 2

Presumption generally against intention to create legal relations. Defendant needs to prove the relationship is contractual and not family.

Question 3

Fleming v Beavers (Social setting that was binding)

Answer 3

A de facto couple agreed to share a house with the other in their wills if one died. Mr Beevers died without changing his will.
Held = it was binding because there was intention to create legal relations through a contractual document (will)

Question 4

Ashton v Pratt (Social setting not binding)

Answer 4

Businessman promised mistress to leave her money on trust for her son. He didn’t do this.
Held = Not binding as no intention to create legal relations. Discussion informal and not specific.

Question 5

Commercial setting

Answer 5

Presumption is in favour of intention to create legal relations.

Question 6

Tower v Nicon

Answer 6

If there are big gaps in the contract to be decided later then that is an agreement to agree rather than a binding agreement.
Held = No big gaps. The document int his case didn’t identify any matters not agreed on. Parties took steps 18 months after the contract which also shows intention to be bound.

Question 7

Deng v Zheng

Answer 7

Cultural considerations are relevant to consideration. No formal agreement of a partnership but internal accounts and documents pointed to an intention to be bound.

Question 8

Factors that point towards intention to be bound

Answer 8

Commercial events
Large sums of money
In writing
Cultural factors suggest binding (could be important for tikanga)
Serious consequences
Penalties
Lawyers