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Week 3: Law of Contract (Intention to create legal relations (Agreements…

- - - - Presumption is that there is no intention to create a legally binding contract. However, this presumption can be rebutted.
      - Clarity of terms, cost and inconvenience, and true flavour of agreement considered by the court to determine true intentions of contract
    - - Ermogenous v Greek Orthodox Community of SA (CACL 4.20)
      - Presumption is that there is intention to create a legally binding contract. However, this presumption can be rebutted.
        
        "Heads of Agreement"
        
        Malago Ptd Ltd v AW Ellias Engineering (call 4.130)
        
        "Letter of comfort"
        
        Banque Brussels v Australian National Industries (cacl 4.190
      - Rebuttal: expresses exclusion of intention
        
        "Honor Clause"
        
        Rose & Frank co v Jr Crompton & Bros Ltd
  - - - Not legally binding under contract law, no intentions to create legal relations
      - However, when governments enter into normal commercial transactions, there is a press¡umtpion that it is a legally binging contract
- - - - "even a peppercorn is good consideration"
    - - It must be possible to objectively evaluate the promise
    - - Executed
        
        One party performs an actual act in exchange for the others party promise (ex. Carlill V Carbolic Smoke Ball Co).
      - Past= the act is already done before the promise.
        
        ex. a person works all weekend and then promised a bonus
        
        ex. annual bonus schemes for outstanding performance over the course of the previous year
        
        Exception in (CACL 5.100)
      - Executory
        
        One party gives a promise in exchange for the other party promise. (Ex. a promise to deliver goods in 7 days time, and a promise to pay for them 14 days after that)
    - - Why? you are not providing anything of new value, as you are already required to undertake the action anyway.
      - Stilk v Myrick (CACL 5.140)
      - Glasbrook v Glamorgan CC (CACL 5.130)