Intention To Create Legal Relations Flashcards
Intention to create legal relations
• In addition to the presence of an agreement and consideration it is also important that there was an intention to create legal relations between the parties.
• This is an objective test.
• Therefore domestic arrangements are generally not deemed to give rise to legal relations unless the contrary is proven.
Objective test
Must have an intention to create a legally binding contract. This is an objective test, question is- objectively speaking was there an intention to create legal relations.
Domestic or social arrangements
presumed not to be legally binding unless the contrary is shown.
Balfour v Balfour
a husband worked for the civil service and was working abroad. He agreed to send money back to his wife at home, who could not go because of her health. The marriage subsequently broke down and the husband stopped sending money, and the wife sued. The court held there was a presumption that no legally binding agreement was intended as it was made informally.
By contrast in Moffitt v Moffitt
where a couple separated and the wife remained in the shared home, with the husband agreeing to continue pay off the mortgage. On the facts, there was an actual agreement between the husband and wife and therefore there was an intention to create a legally binding agreement.
Jones v Padvatton
The previous case is not limited to spouses. This case concerned concerned a parent and child. A mother wished for her daughter to become a barrister and offered her a monthly allowance and a house to live in. When the relationship broke down the court held the agreement was not intended to create legal relations as it was imprecise, of undefined duration and not in writing, and was therefore just a family arrangement.
Haggar v De Placido
written agreement was intended to create legal relations and was therefore legally binding
Commercial arrangements
Presumed to give rise to legal relations
Esso Petroleum
legally enforceable contract arose from a transaction where football tokens were offered to anyone who purchased 4 gallons of petrol. This took place in setting of business relations and was designed to encourage purchase of petrol.
