Intention to create legal relations
Before looking at if the intention to create legal relations should be used to replace consideration, it is important to look at how these doctrines fit into the essential elements in a contract. Their use will then be discussed, together with the doctrine of promissory estoppel. In evaluating these principles reference will be made to case law, judicial comment and of leading contract academics work. Finally, thought will be given to the future of consideration, and if it is still necessary today, when so many other countries have adopted alternative approaches to ensuring that contracts are binding.
In the formation of contracts two elements are vital. Firstly, the "offer," an indication by one person prepared to contract with another, on certain terms, which are fixed, or capable of being fixed at the time the offer is made.[1] Secondly, there must be an "acceptance", an unconditional assent to a definite offer.[2] These two combine to create certainty that a contract has been formed, for, as in Scammell v Ouston (1941),[3] "if an agreement is uncertain on some important issue...the courts will hold there is no contract."[4] Following this, the elements of consideration and intent provide the contract's "body and substance"[5]
So, what is meant by "consideration" and "the intention to create legal relations"? English law usually requires proof that the parties have made a bargain, or agreement,[6] this is known as the benefit and detriment test. (Currie v Misa (1875))[7] or " a benefit to one party or a detriment to another."[8] So, in practical terms consideration can be defined as what one party in an agreement is giving, or promising, in exchange for what is being given, or promised, by the other side. [9] This provides mutuality, making the contract enforceable. The Oxford Dictionary of Law definition states, "Consideration is essential to the validity of any contract other than one made by deed. Without consideration an agreement not made by deed is not
In the formation of contracts two elements are vital. Firstly, the "offer," an indication by one person prepared to contract with another, on certain terms, which are fixed, or capable of being fixed at the time the offer is made.[1] Secondly, there must be an "acceptance", an unconditional assent to a definite offer.[2] These two combine to create certainty that a contract has been formed, for, as in Scammell v Ouston (1941),[3] "if an agreement is uncertain on some important issue...the courts will hold there is no contract."[4] Following this, the elements of consideration and intent provide the contract's "body and substance"[5]
So, what is meant by "consideration" and "the intention to create legal relations"? English law usually requires proof that the parties have made a bargain, or agreement,[6] this is known as the benefit and detriment test. (Currie v Misa (1875))[7] or " a benefit to one party or a detriment to another."[8] So, in practical terms consideration can be defined as what one party in an agreement is giving, or promising, in exchange for what is being given, or promised, by the other side. [9] This provides mutuality, making the contract enforceable. The Oxford Dictionary of Law definition states, "Consideration is essential to the validity of any contract other than one made by deed. Without consideration an agreement not made by deed is not