Intention to create Legal relations

Question 1

A contract is legally binding in business agreements.

Answer 1

True

Question 2

Agreements with a Social and domestic nature are not presumed to be legally binding.

Answer 2

True

Question 3

The presumption of being legally binding can be changed in a business agreement if it is declared as a what agreement?

Answer 3

A gentleman’s agreement. As seen in the case of Jones v Vernon pools.

Question 4

What case demonstrates that a gift promised to promote a business can still be held legally binding?

Answer 4

Esso v Commissioners of Customs - Esso gave a free world cup coin for every 4 gallons of petrol bought. Should the gift attract tax? The gift was gaining the business customers so it should attract tax.

Question 5

What is a letter of comfort?

Answer 5

An assurance about a debt given to a bank by a third party. They are NOT legally binding.

Question 6

Which case proves a letter of comfort cannot be used as a legally binding source of a contract?

Answer 6

Klienwort v Malaysian mining.

Question 7

Which case supports that social and domestic agreements are not legally binding?

Answer 7

Balfour v Balfour.

Question 8

Social and domestic agreements, where families make arrangements, can often be seen as business arrangements and have intention to create legal relation. For example in the case of…?

Answer 8

Jones v Padavatton.

Question 9

Social and domestic agreements, where money had been exchanged even if the arrangement is social such as a lottery syndicate, can often be seen as business arrangements and have intention to create legal relation. For example in the case of…?

Answer 9

Simpkins v Pays.

Question 10

Social and domestic agreements, where parties put their financial security at risk for an agreement, can often be seen as business arrangements and have intention to create legal relation. For example in the case of…?

Answer 10

Parker v Clarke.

Question 11

Legal principle…

Edwards v Skyways Ltd

Answer 11

Should be in a business context.

Question 12

Legal principle…

Jones v Vernon Pools

Answer 12

Agreements in honour (such as football bets) are not legally binding.

Question 13

Legal principle…

Esso v Customs

Answer 13

Intention to be bound is a decision for the courts.

Question 14

Legal principle…

Klienwort v Malaysian Mining

Answer 14

Letters of comfort are not legally binding.

Question 15

Legal principle…

Merritt v Merritt

Answer 15

Separated couples can form a business contract.