Intention to Create Legal Relations [Contract Law]

Question 1

Paragraph One

Answer 1

Identify the types of agreements and apply which ones are relevant and what the issue is.

Question 2

Paragraph Two

Answer 2

State what the presumptions are and who must rebut them, for every type of agreement.

Then apply to the scenario.

Question 3

Domestic Agreements

Answer 3

• Normal assumption: no ICLR (Balfour v Balfour)
• However the case of Merritt v Merritt showed that if a high modicum of formality and separation goes in to the agreement, there may have been ICLR, such as within a divorced/separated couple
• If there is a reliance on the promise, this may also show an ICLR (Parker v Clarke).

Question 4

Social Agreements

Answer 4

No ICLR in general agreements between friends (Buckpitt v Oates) or in ‘casual conversation’ between them (Wilson v Burnett).

However, if money is regularly and fairly changing hands as part of the agreement, there may have been ICLR (Simpkins v Pays)

Question 5

Commercial Agreements

Answer 5

• Normal assumption: no ICLR (Carlil)
• If there is very clear wording that excludes legal relations, then there is no ICLR (Jones v Vernon Pools).
• Wording informing of a current or future intention, ‘comfort letters’, do not indicate an ICLR (Kleinwort v Malaysia Mining Corp).
• Also the statement that an agreement is ‘ex gratia’ (out of good will) is not enough to rebut the presumption of ICLR (Edwards v Skyways).

Question 6

Family and Friends Commercial Cases

Answer 6

• Snelling v Snelling (FAMILY)

- Sadler v Reynolds (FRIENDS)