Contract Law - Intention to Oontract
Contract Law 1
Intention to Create Legal Relations
In order for a contract to be valid there must be intention to create legal relations.
Enright notes ‘the requirement of intention to create legal relations is a final doorkeeper in contract. It determines which agreements supported by consideration shall be covered by contract law and which shall merely be morally binding.’ This requirement was expressly stated for the first time in Heilbut, Symons & Co V Buckleton.
Friel notes that important as there are a great many agreements and arrangements that, though possessing many of the characteristics of contract, probably are not intended to attract legal consequences.
Intention to be legally bound operates on the basis of presumptions.
The test for intention is objective. The court will impute intention to create legal relations to the parties on the basis on external factors rather than on the workings of the parties’ minds.
Intention and Presumptions
There are two presumptions in this area: 1. There is a presumption that agreements between family members or friends are not intended to be legally binding. 2. There is a presumption that agreements which are made in a commercial context are intended to be legally binding.
Social and Domestic Arrangements
A close family of social relationship raises a presumption of lack of intention to create legal relations.
The seminal case, Balfour V Balfour involved maintenance payments to be sent home to his wife while he was working abroad. The court held that agreements between husband and wife are not intended to be legally binding.
The closer the blood relationship the more readily the presumption will be raised and the more distant the degree of blood relationship, the more likely the courts will infer an intention to be legally binding. This can be seen in Simpkins V Pays where an informal agreement between a landlord and his lodger, to enter into a weekly competition, held lodger entitled to share
Intention to Create Legal Relations
In order for a contract to be valid there must be intention to create legal relations.
Enright notes ‘the requirement of intention to create legal relations is a final doorkeeper in contract. It determines which agreements supported by consideration shall be covered by contract law and which shall merely be morally binding.’ This requirement was expressly stated for the first time in Heilbut, Symons & Co V Buckleton.
Friel notes that important as there are a great many agreements and arrangements that, though possessing many of the characteristics of contract, probably are not intended to attract legal consequences.
Intention to be legally bound operates on the basis of presumptions.
The test for intention is objective. The court will impute intention to create legal relations to the parties on the basis on external factors rather than on the workings of the parties’ minds.
Intention and Presumptions
There are two presumptions in this area: 1. There is a presumption that agreements between family members or friends are not intended to be legally binding. 2. There is a presumption that agreements which are made in a commercial context are intended to be legally binding.
Social and Domestic Arrangements
A close family of social relationship raises a presumption of lack of intention to create legal relations.
The seminal case, Balfour V Balfour involved maintenance payments to be sent home to his wife while he was working abroad. The court held that agreements between husband and wife are not intended to be legally binding.
The closer the blood relationship the more readily the presumption will be raised and the more distant the degree of blood relationship, the more likely the courts will infer an intention to be legally binding. This can be seen in Simpkins V Pays where an informal agreement between a landlord and his lodger, to enter into a weekly competition, held lodger entitled to share