Intention To Create Legal Relations Flashcards
What does intention to create legal relations mean
there is an express or implied agreement that the contract is legally binding and therefore enforceable in court
What are the two main types of agreements in intention to create legal relations?
. Commercial agreements (presumed to be binding) and social/domestic agreements (presumed to not be binding).
What is the presumption for commercial agreements?and case
There is a presumption that they are legally binding (Esso v Commissioners for Customs and Excise).
. Who has the burden of proof to rebut the presumption in commercial agreements?
The party that wishes to prove there was no intention to create legal relations.
How can the presumption in commercial agreements be rebutted?
By showing evidence that no legal intention existed, using specific factors.
When will the presumption be rebutted due to a lack of commercial gain? 2 reasons and 2 cases
If the agreement was for a free gift (Esso v Commissioners for Customs and Excise) or a competition prize (McGowan v Radio Buxton) that was not intended to promote busines
How can a “gentlemen’s agreement” rebut the presumption?.case
If the wording clearly shows no intention to be legally binding (Rose & Frank Co v Crompton Bros).
How can unclear wording prevent an agreement from being legally binding? And case
If the promise is too vague to create a binding obligation (Kleinwort Benson Ltd. v Malaysian Corporation).
What is a letter of comfort, and how does it affect legal intention? Case
A letter of comfort indicates moral assurance but is not legally binding (Kleinwort Benson Ltd. v Malaysian Corporation).
How does an agreement based on goodwill affect intention?case
It is not legally binding if only based on goodwill (Edwards v Skyways Ltd.).
What is the presumption for social/domestic agreements?,case
That they are not intended to be legally binding (Balfour v Balfour, Jones v Padavatton, Buckpitt v Oakes).
Who has the burden of proof to rebut the presumption in social/domestic agreements?
The party that wishes to prove the agreement was legally binding.
How can the presumption in social agreements be rebutted?
By showing evidence that the agreement was more than just social/domestic.
How does the breakdown of a relationship affect legal intention?cases one is before the breakdown and one is after the breakdown.
If the agreement was made after the breakdown, it is legally binding (Merritt v Merritt), but if made before, it is not (Balfour v Balfour).
When does reliance on a promise create legal intention?cases
If one party has acted on the promise to their detriment (Parker v Clarke).
How can a social agreement turn into a commercial one? Case
If family/friends enter a commercial relationship (Snelling v Snelling).
How does a commercial basis (e.g., time factor) affect legal intention?cases
If the agreement has serious commercial consequences, it is legally binding (Albert v Motor Insurer’s Bureau).
How does the exchange of money affect legal intention?cases
If money has changed hands, the agreement is likely binding (Simpkins v Pays)
What happens if an agreement falls between social and commercial?(Halfway house)case
The party arguing that the agreement was legally binding must prove intention (Sadler v Reynolds).
How do courts determine intention in “halfway house” cases?
: They consider factors on both sides and decide the most likely interpretation.
