Intention To Create Legal Relations Flashcards
IF BUSINESS : What presumption do business contacts have + case ?
They have a presumption that there is an intention t create legal relations and so are legally binding ( ESSO PETROLEUM v CUSTOMS ). Both parties need to give consideration for this to be the case.
IF RELEVANT : How can this presumption be rebutted + cases ?
Where clear words are used to show no legal intent ( EDWARDS v SKYWAYS ) , such as “act of goodwill“ or “binding in honour/gentlemen’s agreement“ ( JONES v VERNONS POOL ) or where the words used are too vague to be a specific promise ( ‘letter of comfort’ - KLEINWORT BENSON v MALAYSIAN MINING )
IF RELEVANT : What other contracts are legally binding + cases ?
Contracts involving free gifts and competition prizes are legally binding ( MCGOWAN v RADIO BUXTON , ESSO PETROLEUM v CUSTOMS AND EXCISE )
Who has the burden of proving in business contracts ?
The party trying to establish no legal intent has the burden of proving that the rebuttal applies.
What about if the contract is not clearly domestic or commercial + case ?
It will be for the person seeking to enforce it to show legal intent ( SADLER v REYNOLDS ).
IF DOMESTIC : What presumption do domestic/social contracts have + cases ?
They have a presumption that there is no intention to create legal relations and so aren’t legally binding ( BALFOUR v BALFOUR , JONES v PADAVATTON )
IF RELEVANT : How can this presumption be rebutted ?
Where there is a commercial basis to the contract , where both parties have given consideration.
IF RELEVANT : What does this usually involve + cases ?
Money changing hands ( SIMPKINS v PAYS ), the basis is no longer ‘love and affection’ (MERRITT v MERRITT ), and/or the parties acted on the promise ( PARKER v CLARK ).
IF RELEVANT : What must C have to rebut the presumption + case ?
There must be sufficient evidence to rebut the presumption ( PECK v LATEAU/WILSON v BURNETT ).
IF RELEVANT : How can domestic arrangements be held to be business arrangements + case ?
If they go beyond “social kindness” as in ALBERT v MOTOR INSURER’S BUREAU.
IF RELEVANT : Are family business agreements and pre-nuptial agreements legally binding + cases ?
Family business agreements can be legally binding as long as there is no rebuttal ( SNELLING v SNELLING ) and pre-nuptial agreements are increasingly seen by the courts as legally binding ( GRANATINO v RADMACHER )
When can a contract between family members not be legally binding ?
Where clear words are used to show no legal intent such as “act of goodwill” a contract between family members may not be legally binding even if it has a commercial basis.
Who has the burden of proving that the rebuttal applies ?
The party trying to establish legal intent has the burden of proving that the rebuttal applies .
