Intention
1. Intention “It is essential to the creation of a contract that the parties intend their agreement to be binding in the sense of being enforced by a Court. In most instances the parties will make no express reference to this requirement. Therefore the courts must construe the intention of the parties by using the objective test: After considering all the relevant circumstances, would a reasonable person conclude that the parties had intended to contract”.
Required
Please discuss the above statement using legal principles and case law if relevant.
Answer:
a. Intention is a primary element of a simple contract and a mere agreement does not in itself create a contract. Therefore, in applying the objective test the courts tend to draw a distinction between agreements that are clearly of a social or domestic character and agreements that are of a commercial character. However, each presumption is rebuttable if there is evidence indicating a contrary intention.
1) Domestic agreements
i. If the agreement is of a social or domestic nature the courts are generally prepared to presume that the parties did not intend to contract. Take Balfour vs Balfour case for instance, the agreement between couple was considered as a domestic arrangement which was a presumption not intended to be legally binding. ii. The presumption may be rebutted if there is evidence which indicates a contrary intention. Todd vs Nicol demonstrates how the presumption may be rebutted in appropriate situation.
2) Commercial agreements
i. General rule
In general, the court presumes that the parties intended their agreement to be legally bonded if the agreement is of a commercial nature. ii. However, if one of the parties clearly claims and proves that a commercial agreement was not intended to be a contract and that general presumption may be rebutted. Eg. Rose vs Frank Company.
3) Intention can be a case in the following type of cases
i. Letters of comfort or
Required
Please discuss the above statement using legal principles and case law if relevant.
Answer:
a. Intention is a primary element of a simple contract and a mere agreement does not in itself create a contract. Therefore, in applying the objective test the courts tend to draw a distinction between agreements that are clearly of a social or domestic character and agreements that are of a commercial character. However, each presumption is rebuttable if there is evidence indicating a contrary intention.
1) Domestic agreements
i. If the agreement is of a social or domestic nature the courts are generally prepared to presume that the parties did not intend to contract. Take Balfour vs Balfour case for instance, the agreement between couple was considered as a domestic arrangement which was a presumption not intended to be legally binding. ii. The presumption may be rebutted if there is evidence which indicates a contrary intention. Todd vs Nicol demonstrates how the presumption may be rebutted in appropriate situation.
2) Commercial agreements
i. General rule
In general, the court presumes that the parties intended their agreement to be legally bonded if the agreement is of a commercial nature. ii. However, if one of the parties clearly claims and proves that a commercial agreement was not intended to be a contract and that general presumption may be rebutted. Eg. Rose vs Frank Company.
3) Intention can be a case in the following type of cases
i. Letters of comfort or