Intention to create legal relations Flashcards
What precedent does Balfour v Balfour (1919) set?
Where a husband and wife are living together as one household, the courts will assume that they do not intend to be legally bound.
What exception does Merritt v Merritt (1969) create to the Balfour rule?
Lord Denning pointed out that the Balfour rule is ‘a family arrangement’ and this does not apply where the parties have separated or were about to do so.
What precedent does Jones v Padavatton (1969) set?
Arrangements between parents and children are presumed NOT to be intended to be binding.
What precedent does Wilson v Burnett (2007) set?
Agreements between friends are generally not seen to be binding - i.e. on winning the lottery and promising to share the winnings, the losing party cannot sue the other for the money that they promised to give.
What exception does Simpkins v Pays (1955) create to the Wilson rule?
Where the claimant has contributed to the competition, i.e. paying for part of a lottery ticket would entitle you to a part of the prize money.
What precedent does Esso Petroleum Ltd v Customs and Excise Commissioners (1976) set?
The case concerned whether motorists who bought 4 gallons of petrol were contractually entitled to a world cup coin (as advertised by Esso). The House of Lords held that because the coins were not being sold, they were not liable for tax - however there WAS intention to create legal relations.
Generally in commercial agreements there is a strong presumption that the parties intend to be bound.
What is there mere puff exception to the commercial agreements presumption? Give an example.
Where an offer is vague, or clearly not to be taken seriously, the law will not give its acceptance contractual effect. See Weeks v Tybald (1604).
What is the honour clause exception to the commercial agreements presumption? Give an example.
If an agreement is said to be ‘binding in honour only’ then it will not have legal force behind it. See Jones v Vernon’s Pools which allowed for the company not to be sued for payment by a winner.
What is the agreement ‘subject to contract’ exception to the contractual agreements presumption? Give an example.
An agreement which contains the words ‘subject to contract’ will usually be taken to mean that the parties do not intend to be bound by the agreement. Confetti Records v Warner Music UK Ltd - held that a fax marked ‘subject to contract’ did not constitute a contract.
How will an ambiguous clause of a contract be treated by the courts? Give an example.
The courts will favour the interpretation which suggests that the parties DID intend to create legal relations. Edwards v Skyways Ltd - Court concluded that although an ex gratia agreement was used, (given in return for Edwards not being paid his full pension) this was too ambiguous and therefore it merely signified that the employers were not admitting any pre-existing liability to make the payment, it did not mean that they were not legally bound by the agreement.
What does the Trade Union and Labour Relations (Consolidation) Act say about collective bargaining agreements?
Collective bargaining agreements (where an employer negotiates pay and conditions with a workforce as a whole, rather than with each individual) are conclusively presumed not to be intended to be legally binding UNLESS they expressly state otherwise in writing.
