Intention To Create Legal Relations

Question 1

What does intention to create legal relations mean?

Answer 1

the intention to be legally bound - in business agreements this is presumed whereas in social/domestic agreements it is presumed they do not

Question 2

Business agreements and exceptions + cases

Answer 2

-Esso v Customs - presumed to have legal relations
-Kleinworth v Malyasian Mining Cooperation - not a contractual promise because this was the plain meaning of the words of the letter (vauge words)
-Rose and Frank v Crompton - words in a contract that directly excludes a binding agreement

Question 3

Social agreements + case

Answer 3

Presumed to not be legally binding
-Balfour v Balfour - there was no ICLR as it was a domestic agreement between a husband and wife

Question 4

Social agreements exceptions + cases

Answer 4

-Merritt v Merritt - Between a husband and wife but their relationship had broken down and were no longer acting on the base of love and affection so there was ICLR.
-Parker v Clarke - if the parties have acted in reliance on the promise there will be ICLR.
-Snelling v Snelling - if there is a commercial basis to the contract then there will be ICLR.

Question 5

For presumption in social cases

Answer 5

-Law must “leave space to trust each other”. It would damage personal relations if every promise was legally enforceable.
-Less need, perhaps for “artificial trust” among people who are close – and so less of a role for the law.
-Opening the floodgates to litigation.
-Found presumption in some cases balancing the law but the intention is not always obvious.

Question 6

Against the presumption in social cases

Answer 6

-Patriarchal assumptions, disadvantages for women and informal carers.
-Out of step with a wider trend for more state intervention into the realm of personal relationships.
-Having no intention is important for weaker parties as it stops them from being dragged into the costly contract battle

Question 7

For presumption in business agreements

Answer 7

-Upholds certainty and good for the economy.
-Exceptions means the parties can remain in control and provides protection for companies

Question 8

Against the presumption in business agreements

Answer 8

-Unfair with unilateral contracts (carlill) as there was legal intent purely for policy reasons such as to improve consumer rights, favouring the consumer rather than the business.
-Courts have been influenced by fairness which is not compromised with the legal principle and have departed away from the basic rule of presumption and given themselves freedom to not find legal intention.

Question 9

Reform

Answer 9

-Overlaps with consideration, so its pointless.
-‘There should be presumption in social agreements’, Lord Atkin stated this and said that they should limit domestic cases as it takes up courts time so if there was presumption there would be no question if there was legal intent or not.
-Outdated so needs reform
-Contracts containing consideration come to court anyway so wouldn’t make a difference if there wasn’t ICLR.