Intentions to Create Legal Relations

• ITCLR


  Intention to create legal relations
• Not all promises can be enforced by the courts
• Commercial and business agreements


  • Presumption is in favour of the intention to create legal relations
• Social and domestic agreements


  • Presumption is against the intention to create legal relations
• Commercial agreements


  • Edwards v Skyways (1964) - agreements made in a business context hold a strong presumption that the agreement is legally binding.
  • Esso Petroleum v Commissioners of Customs and Excise (1976) - even offers to give away free gifts to promote a business create a presumption in favour of the intention to create legal relations.
• Commercial agreements can rebut the presumption that they are legally binding by specifically stating it is not binding
• Commercial agreements rebutting presumption of legal binding


  • Jones v Vernon's Pools (1938) - even offers to give away free gifts to promote a business create a presumption in favour of the intention to create legal relations.
  • Confetti Records v Warner Music UK Ltd (2003) - similar situation, use of the phrase "subject to contract" on a document acts as an exception to the general rule that commercial agreements are intended to be legally binding.
• In social or domestic agreements, there is a presumption that the parties did not intend to create a legal relationship
• Social agreements


  • Jones v Padavatton (1969) - an agreement was unenforceable between mother and daughter.
  • Balfour v Balfour (1919) - there was no intention to create legal relations where an agreement was made between a husband and wife who were happily married.
  • Wilson v Burnett (2007) - there must be certainty and clarity to rebut the presumption that social agreements are not intended to be binding.
• Rebutted the presumption of no ITCLR in social agreements


  Simpkins v Pays (1955) There was a binding contract between family

  members because an unrelated lodger was also party to the contract.