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Questions and Answers
In determining whether parties intended to enter into a legally enforceable agreement, which approach do courts primarily use?
In determining whether parties intended to enter into a legally enforceable agreement, which approach do courts primarily use?
- Applying strict legal presumptions based on the nature of the agreement.
- Relying solely on the written documentation without considering external factors.
- Examining the private thoughts and feelings of each party involved.
- Objectively assessing the words, conduct, and surrounding circumstances. (correct)
When assessing intention to create legal relations in agreements between partners, what factor is most likely to indicate a lack of such intention?
When assessing intention to create legal relations in agreements between partners, what factor is most likely to indicate a lack of such intention?
- The partners are living together in amity and have a close relationship. (correct)
- The partners seek legal advice before entering into the agreement.
- The agreement is documented in a formal written contract.
- The agreement is complex and involves significant financial transactions.
In which of the following scenarios is a family agreement most likely to be considered legally binding?
In which of the following scenarios is a family agreement most likely to be considered legally binding?
- An informal agreement between siblings to share household chores.
- A parent's promise to provide financial support to their adult child.
- A casual agreement to split lottery winnings among family members.
- An agreement where one family member relocates significantly based on a promise. (correct)
What is the primary factor that distinguishes a granny flat arrangement from a standard property transaction regarding intention to create legal relations?
What is the primary factor that distinguishes a granny flat arrangement from a standard property transaction regarding intention to create legal relations?
Which of the following clauses would most clearly demonstrate an express exclusion of intention to create legal relations in a commercial agreement?
Which of the following clauses would most clearly demonstrate an express exclusion of intention to create legal relations in a commercial agreement?
How are letters of comfort generally treated in the context of intention to create legal relations?
How are letters of comfort generally treated in the context of intention to create legal relations?
In what scenario is a government agreement most likely to be considered a legally binding contract?
In what scenario is a government agreement most likely to be considered a legally binding contract?
What is the key requirement for consideration to be valid?
What is the key requirement for consideration to be valid?
Which of the following best exemplifies consideration that is considered 'vague or illusory' and therefore not valid?
Which of the following best exemplifies consideration that is considered 'vague or illusory' and therefore not valid?
Which of the following statements accurately describes the principle that consideration must move from the promisee?
Which of the following statements accurately describes the principle that consideration must move from the promisee?
What is the key distinction between executed and executory consideration?
What is the key distinction between executed and executory consideration?
Under what circumstances might performing an existing public duty be considered good consideration?
Under what circumstances might performing an existing public duty be considered good consideration?
In the context of modifying a contractual obligation, what is generally required for a promise to pay an additional sum to be enforceable?
In the context of modifying a contractual obligation, what is generally required for a promise to pay an additional sum to be enforceable?
According to the practical benefit test established in Williams v Roffey Bros, what is a key factor in determining whether a promise of additional payment is enforceable?
According to the practical benefit test established in Williams v Roffey Bros, what is a key factor in determining whether a promise of additional payment is enforceable?
Which requirement is unique to contracts under seal (deeds) compared to simple contracts?
Which requirement is unique to contracts under seal (deeds) compared to simple contracts?
What distinguishes promissory estoppel from traditional contract law principles?
What distinguishes promissory estoppel from traditional contract law principles?
According to the requirements for promissory estoppel, what must a promisee demonstrate to successfully invoke the doctrine?
According to the requirements for promissory estoppel, what must a promisee demonstrate to successfully invoke the doctrine?
In the context of promissory estoppel, what does 'detriment' typically refer to?
In the context of promissory estoppel, what does 'detriment' typically refer to?
What is the primary aim of the remedy granted in cases of promissory estoppel?
What is the primary aim of the remedy granted in cases of promissory estoppel?
In situations where parents provide substantial funds to their children for a property purchase, what approach do courts take when assessing the intention to create legal relations?
In situations where parents provide substantial funds to their children for a property purchase, what approach do courts take when assessing the intention to create legal relations?
Flashcards
Intention to create legal relations
Intention to create legal relations
Determined objectively by examining words, conduct, and circumstances to decide if parties intended a legally enforceable agreement.
Social and domestic agreements (partners)
Social and domestic agreements (partners)
Generally, these aren't intended to create a legally binding agreement, especially when living together harmoniously.
Granny flat arrangements
Granny flat arrangements
An agreement where parents provide money conditioned on having a place in their children's home.
Intention in commercial agreements
Intention in commercial agreements
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Letters of comfort
Letters of comfort
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Government Agreements
Government Agreements
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Consideration: Sufficient, not adequate
Consideration: Sufficient, not adequate
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Consideration: Not vague/illusory
Consideration: Not vague/illusory
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Consideration from promisee
Consideration from promisee
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Executed Consideration
Executed Consideration
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Executory Consideration
Executory Consideration
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Past Consideration
Past Consideration
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Performing an existing public duty
Performing an existing public duty
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Modifying a contractual obligation
Modifying a contractual obligation
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Contracts under seal (deed)
Contracts under seal (deed)
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Promissory Estoppel
Promissory Estoppel
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Requirements for promissory estoppel
Requirements for promissory estoppel
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Remedy for promissory estoppel
Remedy for promissory estoppel
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Study Notes
Intention to Create Legal Relations
- Intention is determined objectively by examining the parties' words, conduct, and surrounding circumstances.
- Parties must objectively intend to enter into a legally enforceable agreement.
Intention and Social and Domestic Agreements
- Agreements between partners living together are generally not intended to be legally binding.
- Agreements between partners living in conflict are more likely to be intended to create legal relations.
- Other family or social agreements may or may not be legally binding, depending on the circumstances.
- Relocating due to an agreement can be a sign of legal intent.
- Granny flat arrangements involve parents providing money to children for housing with the understanding they will have a place in that home.
Intention and Commercial Agreements
- Business dealings generally indicate an intention to create legal relations.
- Contracts can expressly exclude the intention to create legal obligations.
- Letters of comfort from a parent company to a bank regarding a subsidiary's loan are not binding unless the language indicates otherwise.
Government Policy Proposals
- Arrangements involving the government can be commercial contracts or non-legal administrative/political arrangements.
- Agreements where governments buy or sell goods/services are contractual.
- A subsidy may not be a legally binding agreement.
Consideration
- Consideration is a requirement for simple contracts.
- Consideration must be sufficient but need not be adequate.
- Consideration must not be vague or illusory.
- Consideration must move from the promisee.
Rules Regarding Consideration
- Executed consideration occurs in unilateral contracts when one party performs an act in exchange for a promise.
- Executory consideration occurs in bilateral contracts where parties exchange promises.
- Past consideration is not valid consideration; promises made after contract formation are not enforceable.
- Performing an existing public duty is not good consideration unless one performs more than the existing duty.
- Performing an existing contractual duty is generally not good consideration.
Practical Benefit Test
- A promise to pay an additional sum for performing an existing duty is consideration if:
- The promise was not the result of duress.
- The promise produces a practical benefit for the promisor.
- The renewed promise is enforceable if:
- A has a contract with B to provide work or goods for payment
- B doubts whether A will complete their work.
- B promises A additional payment for on-time performance of original obligations.
- B obtains a benefit from A's promise.
- B's promise is not given under economic duress.
Contracts Under Seal
- Contracts under seal (deeds) require a third-party witness.
Promissory Estoppel
- Promissory estoppel is an equitable doctrine.
Requirements for Promissory Estoppel
- The promisee assumed a legal relationship existed or would exist.
- The promisor induced that assumption.
- The promisee acted or refrained from acting in reliance on that assumption.
- The promisor knew the promisee intended to act that way.
- The promisee will suffer a detriment if the assumptions are not fulfilled.
- The promisor acted unconscionably in failing to prevent damage to the promisee.
Remedy for Promissory Estoppel
- The minimum amount necessary to relieve the detriment caused by unconscionable conduct is required.
- It may not be necessary to force the representor to honor the assumption created.
Tutorial Points
- Courts determine intention by assessing whether a reasonable person would see the situation as intended to create a legal relationship.
- Consideration should be from both sides.
- Detriment is giving up something or refraining from something one is entitled to do.
- Performing an existing contractual duty may be valid consideration if there is practical benefit to the promisor and no duress.
- Promissory estoppel prevents someone from going back on a promise.
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