Intention to create legal relations Flashcards
Albert v Motor Insurers’ Bureau
Intention to create legal relations is necessary for formation of the contract but ‘intention’ is used flexibly and in many cases the parties will not be thinking about the legal implications of what they are doing
Balfour v Balfour
Agreements made in a domestic relationship are presumed not to be binding (outside the bounds of contract law: L Atkin) - see Jones v Padavatton
Stephen Smith
It would strip such agreement of their special value; where this is not true, the rule will not apply: Merritt v Merritt
Pettitt v Pettitt
Where the arrangement is executed as opposed to merely executory, the presumption will not apply
Parker v Clark
Presumption can be rebutted by indications that the agreement was intended to be binding, lasting, inflexible or formally drafted: (a) both sides would have envisaged disputes to be resolved by the courts; see Simpkins v Pays (emphasis on “mutuality”: being inflexibly committed to the same outcome)
Edwards v Skyways
In commercial agreements there is a strong presumption that the parties do intend to create legal relations
Rose and Frank v Crompton and Bros
A document containing an “honourable pledge clause” detailing that the document is not of a legal nature will rebut this presumption; except when business is then conducted regardless
Kleinwort Benson v Malaysia Mining
Comfort letters that merely state company policy have no legal status: fiercely criticised in Banque Brussels Lambert v Australian National Industries (per Rogers CJ)
Relationship with consideration
Calls to abolish consideration in favour of a broader understanding of the legal relations doctrine: dicta in Williams v Roffey, Digilandmall.com. However, it is submitted that a better replacement would be a more sophisticated use of the doctrine of duress
