Intention to create legal relations (formation)

Question 1

How is intention decided?

Answer 1

Objectively
- courts look at the facts
- whether it is reasonable to presume that the parties intended for it to be legally binding

Question 2

What are the two types of agreement?

Answer 2

• Business or commercial (parties intend a legal relationship)
• Social or domestic (parties do not intend to create legal relations)

Question 3

What is a presumption?

Answer 3

Made by court which is deemed to be true unless the defendant can prove otherwise.
Presumptions are ‘rebuttable’ meaning they can be defeated by the defendant if they can prove the presumption not to be true in their case.

Question 4

Business agreements

Answer 4

• Very strong presumption
• Presumption can only be rebutted by very clear wording

Question 5

Social agreements

Answer 5

• Would a reasonable person assume the parties intended to create legal relations?
• Both made changes or given up something would usually lead to legal relations.