Intention to create legal relations

• If there is no intention to create legal relations present, there is no legally binding contract.
• Where the agreement is in a domestic or social situation, there is a presumption that there is no intention to create legal relations (Balfour v Balfour).
• This can be rebutted (Merrit v Merrit).
• Where money has changed hands (even in social situations), it is likley to be deemed a business agreement (Pays).
• Where the agreement is made in a business situation, there is an assumption the contract was intented to be legally binding (Edwards).
• This assumption can be rebutted, e.g. by including words that this was not the intention (Jones).
• Letters of comfort are not usually intended to be legally binding (Malaysian Mining).
• Competitions/prizes designed to promote a company confer intention to create legal relations (McGowan).