Intention to create legal relations

Question 1

Define intention to create legal relations

Answer 1

Is essential in formation of a contract. Lord Stowell explained the rationale of it as “contracts should not be the sports of the idle hour, mere matters of pleasantry and badinage, never intended by the parties to have serious effect what so ever.”

Question 2

Social and domestic agreements

Answer 2

Social and domestic agreements are presumed that there is no intention to create legal relations and so are not usually legally binding however they have a rebuttable presumption that is to state there is intention to create legal relations.

Question 3

Business and commercial agreements

Answer 3

Business and commercial agreements are presumed that there is an intention to create legal relations and so are usually legally binding however they have a rebuttable presumption that is to state there is no intention to create legal relations meaning it would be no longer legally binding.

Question 4

Balfour v Balfour

Answer 4

There was no intention to create legal relations so is unenforceable.

Question 5

Merritt v Merritt

Answer 5

Lord denning “As the parties were ‘not living in amity’ it was safely presumed that they intended to create legal relations

Question 6

Simpkin v Payes

Answer 6

Money changed hands originally so despite it being a social environment there was an intention to create legal relations

Question 7

Jones v Vernons pools Ltd

Answer 7

Clause inserted into every contract that transaction should not give rise to any legal relationship. Can still be reasonable and clear of no intention to create legal relations

Question 8

Edwards v Skyways

Answer 8

Type of payment indicated no pre-existing liability, court felt once payment made, clear ITCLR