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INTENTION TO CREATE LEGAL RELATIONS :thought_balloon: (summary (intention-…

- - - - :one: social & domestic arrangements :family:: generally presumed not to make a legally enforceable obligation
      - :two: commercial agreements:moneybag:: presumption you intend to be legally bound
- - - - Denning MR: Balfour has no application here since the parties were living in amity. In such cases, their domestic arrangements are ordinarily not intended to create legal relations. It is altogether different when the parties are not living in amity, but are separated or about to separate. They then bargain keenly. … It may be safely presumed that they intend to create legal relations :male-judge::skin-tone-2:
- - - - Edwards v Skyways Ltd [1964] 1 All ER 494 :airplane: pilots pension payment- pilot made redundant, had paid into company pension, 2 options:
        :one:receive back all contributions
        :two: treat contributions as 'paid up' and receive pension at 50
        he chose :one: after employer agreed to make 'ex gratia' agreement equalling employee's contributions, then later refused to pay up
        held: use of phrase 'ex gratia' not sufficient to rebut presumption
      - 'gentlemen's agreement' :man_in_tuxedo::skin-tone-4:
        
        Rose & Frank Co v JR Crompton Bros Ltd [1925] AC 445: :rose::man_in_tuxedo::skin-tone-4:
        -:flag-us: company and :flag-gb: company entered into a sole agency agreement in 1913 for the sale of paper goods in USA, contained a clause stipulating that it was not a formal nor legal agreement(rebuttable), and an “honourable pledge” between business partners.used 'honour clauses' whereby the parties agree to exclude the courts and rely on each other's honour
      - 'letters of comfort' :email:
        
        Kleinwort Benson Ltd v Malaysia Mining Corporation [1989] 1 All ER 785 :flag-my::pick: KB agreed loan to wholly owned subsidiary of MMC. Asked parent company to guarantee loan. MMC did not normally guarantee loans of subsidiaries but after negotiation agreed to issue a letter of comfort stating “it is our policy to ensure that business of MMC Metals is at all times in position to meet its liabilities to you”, KB agreed to accept letter of comfort but because this charged a higher interest rate on the loan MMC Metals became insolvent, KB claimed outstanding loan amount from parent company first instance held that parent company liable because of presumption
        CA held: Clause drafted carefully enough to exclude liability on part of parent company -clause was mere statement of fact concerning the bank’s present “policy;” and not a promise that this “policy” will remain in the future