Intention to Create Legal Relations Flashcards
What is an Intention to Create Legal Relations
An agreement will only be a contract if both parties intend to create legal relations i.e. both parties intend to sue each other if either party breaks the agreement.
E.g. JONES V PADAVATTON 1969
E.g. BALFOUR v BALFOUR 1919
What are Business Deals
○ an intention to create a legally binding agreement is automatically presumed
E.g. JONES V PADAVATTON 1969
What are Domestic and Social agreements
○ it is presumed that no such intention exists
○ (if the facts show there is intent to be a legal engagement, court will take into account)
• BUT
○ Both of these presumptions can be rebutted if there is evidence to the contrary
E.g. BALFOUR v BALFOUR 1919
Rebutting the presumption on intention to create legal relations
§ To decide if the presumption has been rebutted the court will take account:
- the nature of the agreement and
- all the circumstances of the case,
so it is largely a factual matter.
What are Letters of Comfort?
- common practice in modern business for businesses
- letters often include promises which are extra to the contractual commitments and their legal status is not always clear- assumed moral responsibility but not a legal liability
E.g. Kleinwort Benson Ltd v Malaysia Mining Corporation 1988