Please enable JavaScript.
Coggle requires JavaScript to display documents.
INTENTION TO CREATE LEGAL RELATIONS - Coggle Diagram
INTENTION TO CREATE LEGAL RELATIONS
need intention to create legal relations to complete a valid contract
domestic agreements
there is a presumption that there is no intention to be legally binding
Balfour v Baflour (1919)
D worked abroad, came home on leave with P (wife)- who was unable to return due to illness
D promised to pay £30 a month
the two became separated- she sued for £30
HELD- husband's promise to wife was not enforceable because there was no consideration/intention to be legally binding
merely a pressumption( not to be legally bound) and
can be rebutted if there is evidence
to the contrary
Merritt v Merritt (1970)
H & W are separated and he had moved in with another woman
H &W met to discuss the family home- H agreed that if W paid the household bills he would transfer the house to her name
she insisted on getting this in writing
HELD- assumption had been rebutted- clearly the parties intended the agreement would be legally binding
agreements between a parent and child
are also governed by the presumption that there is
no intention to create legal relations
Jones v Padavatton (1962)
1962- P wanted D(daughter aged 34) to give up job in Washington and move to London to read for the Bar
P promised D monthly allowance- D moved to London
1964- P bought a house in London, allowed D to live there rent free and rent out the other rooms(keeping the rent paid by the other tenants for herself)
mother decided she wanted her house back. D lived there for 5 years and became a barrister
agreement-
> D left the US to read for the Bar in London receiving a fixed monthly sum in return
agreement ->
P allowed D to live in the house rent free, using rent paid by other tenants to maintain herself
HELD- neither agreement was legally binding because they were family arrangements & never intended to have legal consequences
commercial agreements
where an agreement has a commercial nature it is presumed there is an
intention to create legal relations
this presumption can be rebutted if there is evidence
Rose v Frank v Crompton (1925)
1913- parties entered into agreement containing 'honorable pledge clause' - which stated the agreement would have no legal consequences whatsoever
1919- D terminated the agreement without notice & refused to honor orders already received
P sued for breach of 1913 agreement & non-delivery of goods already ordered
HELD- no entitlement for damages for breach of 1913 agreement-> was not legally binding- D was liable for damages for refusal to honor orders already accepted- as each order was placed and accepted- new separate contracts were formed
the
onus
(responsibility) of proving that a commercial agreement is not legally binding
rests on the person who alleges
it has not legal effect
Edwards v Skyways (1964)
P (pilot) worked for D. D told him he would be made redundant- he was a member of D's pension scheme
he had the right to - withdraw all contributions on leaving D's service/ take right to pension, paybale from age 50
at a meeting with D, P was told that if he withdrew all contributions he would get an ex gratia payment equivalent to contributions
D repaid contributions but refused to make further payments- he argued 'ex gratia' indicated lack of intention to create legal relations
HELD- 'ex gratia' indicated there was no pre-existing duty to make the payment. However, once offer was made and accepted by P- there was a presumption that there was a legally binding contract- D had not rebutted this assumption
parties need to know the agreement will be legally binding
Factors deciding if the parties intended to affect their legal relations
where the agreement is very
vague/ informal
where the
terms
of a promise
leave its performance
entirely to the
discretion of the promisor
where the promise is made in
anger/jest
Licenses Insurance Co v Lawson (1898)
P was buying shares in Co, which D was the director of
at a very stormy board meeting, D promised to make good any loss P made if it bought the shares
HELD- this promise was not intended to be legally binding- no-one at the meeting took it seriously and it had not been recorded in the minutes of the meeting