Intention to effect legal relations (Contract formation) Flashcards
Balfour v Balfour
Family relationships - held that there is a rebuttable presumption against an intention to create a legally enforceable agreement when the agreement is domestic in nature. It has to be rebutted with clear evidence they never intended to be bound.
Jones v Padavatton
Family relationships - The decision demonstrates how domestic agreements, such as in between a mother and daughter, are presumed not to be legally binding unless there is clear intention.
Rose & Frank v Crompton Bros
Commercial relationships - the Court gave overriding weight to the provision in the agreement that expressly provides that it is to be solely an “honourable pledge”, as demonstrating that the parties did not intend the arrangement as a legally-binding contract.
The Court explained that the argument that clauses restricting the legal enforceability of a contract apply solely when the document is otherwise unquestionably of legal force. In this case, the document and circumstances did not intend to create any legal interest, and the clause expressly precluding the agreement’s legal enforceability applies.
Secondly, the Court held that the fact that the arrangement does not constitute a legal contract does not preclude the orders and acceptances from constituting legally-binding contracts. The lack of enforceability of an express legal arrangement under an agency agreement does not preclude the legal transactions. The orders constituted mutual offers and acceptances with each transaction having ordinary legal significance.
(This combines weirdly with UCTA)
Merrit v Merrit
Family relationship exceptions - When parties are in the process of separating, or are separated, the presumption of there being no intention to create legal relations does not apply. The arrangement was sufficiently certain to be enforceable, and the paying of the mortgage was ample consideration for Mr Merritt’s promise
