intention to create legal relations

• what is the definition of intention? 


  parties make agreement intending to make a legally binding contract with intention to sue
• what is the presumption for social and domestic agreements? 


  no intention to create legal relations (no contract)
• no intention if married and still together, no contract as parties never intend for such agreement to be sued upon.

  Balfour v Balfour
• where parties are separating, or separated, and/or if agreement is in writing, presumption that there is no intention doesn't apply = legally enforceable


  Meritt v Meritt
• presumption is no intention if it is between family


  Jones v Padavaton
• legally enforceable if not family and language/circumstances indicate intention


  Parker v Clarke
• shared lifts and shared money between friends = no intention


  Buckpitt v Oates
• no intention if agreement is via casual conversation between friends


  Wilson v Burnett
• intention if it is regular arrangement with shared money (everyone chips in) 


  Simpkins v Pays
• what is the presumption for commercial/business agreements and why? 


  that there is intention because businesses need certainty in their contracts
• what is the law not concerned with?

  bad bargains; so long as agreement is made fairly, law will support it
• how can this presumption for businesses be rebutted? 


  proving that you never wanted to enter a legal relationship (with clear evidence)
• what is the term for agreements clearly worded to indicate no intention? 


  "gentleman's agreements" or "honour-bound agreements"
• case example of needing clear evidence for no intention? 


  Carlill v Carbolic Smoke Ball - intention showed through depositing amounts to building society to meet any claims
• promotions giving away some sort of collectable in return for a sale is intention (advertising)


  Esso v Customs and Excise
• no contract if it was made clear there was no legal intention (individual and company) 


  Jones v Vernon's Pools
• wording/honourable pledges that state it isn't a formal agreement will rebut presumption for agreements between businesses


  Rose and Frank co v Crompton
• any exclusion clause must be reasonable 


  Unfair Terms in Consumer Contract Regulations 1999
• meaning of domestic agreements:


  Agreements between family members
• meaning of social agreements


  Between friends, work colleagues, and neighbours
• what did lord atkin say about Balfour v Balfour?


  "Principles of common law...find no place in domestic code"

  "The worst possible example to hold that agreements such as this resulted in legal obligations which could be enforced in the courts"
• what did lord denning say regarding Merritt v Merritt?


  When parties are separating, they are "bargain keenly" for their rights, are thinking about their future, therefore need legally binding agreements and assurance for their rights.

  Where parties are separated and/or agreement is in writing it is easier to assume there is intention. OR if they know it may break down - no longer acting out of love or affection.
• Principle of parker v Clarke 


  One of parties acted to their detriment by relying on arrangements made between them. Language used in letters, along with surrounding circumstances, will suggest that both parties intend the agreement to have legal force.

  Reliance on promise and actions in accordance with it demonstrate there was intention and both parties expected to be legally bound by agreement
• Principle of selling v snelling


  Agreement related to running the business, was a commercial agreement so presumption is that there is intention, the fact they were brothers became irrelevant
• Facts of Albert v motor insurers bureau (MIB)


  Q regularly gave his coworkers lifts to and from work for 8 years and received payments for this.

  Accident, one of his passengers and coworkers died. Albert bought claim under the fatal accidents act 1846-1908 and awarded damages.

  Q failed to meet order, A bought action against Motor insurers bureau on basis that Q was acting on hire/reward basis when giving lifts for purposes of s.203(4) of road traffic act 1960
• Principle of Albert v MIB 


  if there was well established set-out payments, for 8 years one colleague drove and others paid him effectively a taxi service, therefore presumption was rebutted because agreement had become a business one overtime
• Principle of carlill v carbolic smoke ball co


  Party that doesn't want a contract has to rebut presumption that there is intention, for that very clear evidence is needed. Depositing money was sufficient evidence of intention
• principle of Esso v commissioners of custom and excise 


  Advertising/promoting some sort of collectable in return for a sale is intention as there is commercial gain
• Principle of kleinwort Benson v Malaysia mining corp 


  Comfort letters aren't binding. Letter was simply an honest representation of M's policy at the time, presumption doesn't override legal formalities and where it doesnt contain a clear promise, no intention
• Principle of Edwards v skyways 


  Agreement suggested a legal intention to pay, out of goodwill was irrelevant, not enough to prove no intention. Shows wording must be clear/unambiguous
• Principle of sadler v Reynolds 


  Judge suggested that agreement fell "somewhere between an obviously commercial transaction and social exchange". Burden was on journalist to prove that there was an intention to create legal relations, that it was a business agreement and not a social one, intention was found in this case.