Intention to Create Legal Relations Quiz

Intention to Create Legal Relations

• The mere presence of mutual promises and consideration doesn't automatically mean a legal contract. Agreements can be made without intending to be legally enforced.
• The key element is the intention to create legal relations. Consideration often implies this.
• Agreements are categorized as domestic or commercial.

Domestic Agreements

• A presumption exists that domestic agreements lack intention to be legally bound.
• Balfour v Balfour (1919) is a key case.
• This presumption can be overturned if evidence suggests otherwise.
• Merritt v Merritt (1970) shows how presumptions can be rebutted.
• Agreements between family members (parent-child) also usually lack legal intent.
• The presumption also applies to social agreements beyond the family.

Commercial Agreements

• Commercial agreements are presumed to have legal intent.
• Rose & Frank v Crompton (1925) demonstrates how commercial parties can explicitly state their agreement lacking legal effect.
• The burden of proof falls on the person arguing that a commercial agreement lacks legal effect.
• Vague or informal commercial agreements may struggle to pass the legal intent test.
• Agreements where performance is left to the promisor's discretion weaken the case for legal standing.
• Promises made in jest or anger have weak legal standing.