Intention to Create Legal Relations Flashcards
chapter 2
What are the three essential elements of a binding contract?
Agreement (offer and acceptance), consideration, and intention to create legal relations.
What is the key factor in determining if an agreement is legally binding?
Whether the parties had an intention to create legal relations.
What are the two categories of agreements the law uses when determining intention to create legal relations?
Commercial agreements and domestic agreements.
What is the presumption regarding intention to create legal relations in commercial agreements?
There is a very strong presumption that the parties intended their agreement to have legal consequences.
Can the presumption of intention to create legal relations in commercial agreements be rebutted?
Yes, but it requires a clear, express statement that the agreement is not meant to be legally binding, such as “binding in honour only”.
What kinds of agreements are considered commercial?
Agreements between businesses, between individuals and businesses, and even between individuals not in business
What is the presumption regarding intention to create legal relations in domestic agreements?
There is a presumption that the parties did not intend to create legal relations.
Can the presumption of no intention to create legal relations in domestic agreements be rebutted?
Yes, if the facts show otherwise.
Give an example of a domestic agreement where the courts would likely find an intention to create legal relations
An agreement between a husband and wife where solicitors are settling the financial terms of their divorce.
Give an example of a domestic agreement where the courts would likely not find an intention to create legal relations
An agreement between a parent and child about a child’s weekly allowance.
What factors are considered when assessing intention to create legal relations in domestic agreements?
The closeness of the relationship and the amount of money at stake
