Intention to Create Legal Relations

Question 1

What is the legal principle regarding intention to create legal relations in contract law?

Answer 1

For an agreement to be legally enforceable, the parties must demonstrate an intention to create legal relations, assessed based on the context of the agreement

Question 2

What was the key issue in Balfour v Balfour (1919)?

Answer 2

Whether a husband’s promise to pay his wife an allowance constituted a legally binding contract

Question 3

What was the judgment in Balfour v Balfour (1919)?

Answer 3

The court held that the agreement was a domestic arrangement and lacked the intention to create legal relations, making it unenforceable

Question 4

What is the presumption regarding social and domestic agreements + example?

Answer 4

That parties in social or domestic settings do not intend to create legal relations

• A promise between friends to meet for dinner or to lend a small sum of money

Question 5

What is the presumption regarding commercial agreements + example?

Answer 5

In commercial dealings, there is a strong presumption that parties intend to create legal relations

• A lease agreement or an employment contract

Question 6

Who bears the burden of proof in challenging the presumption of intention?

Answer 6

The party asserting that an agreement should be legally binding must prove the intention to create legal relations

Question 7

What 3 factors help determine whether an agreement is social or commercial?

Answer 7

1. Relationship
2. Subject matter
3. Context of the agreement

Question 8

How does the relationship between parties influence contractual intention?

Answer 8

Close friends and family agreements are more likely to be seen as social rather than commercial

Question 9

What happens if a contract is too vague or incomplete?

Answer 9

It may be deemed unenforceable due to uncertainty

Question 10

What was the issue in Scammell v Ouston (1941)?

Answer 10

The phrase “hire purchase terms” was too vague to create a legally binding contract

Question 11

What is the contra proferentem rule?

Answer 11

A contract ambiguity is interpreted against the party who drafted it

Question 12

Who generally has capacity to enter contracts?

Answer 12

Adults of sound mind

Question 13

How does the Minors Contracts Act 1987 affect contract enforceability?

Answer 13

Minors are not bound by their contracts, but the other party is; minors can ratify contracts upon reaching adulthood

Question 14

What does the Mental Capacity Act 2005 state about contracts?

Answer 14

It protects individuals who lack capacity, allowing a court-appointed deputy to act on their behalf