Intent

• When assessing if the parties had intent for a legal relationship the courts make an objective assessment: what would a reasonable third party think?
• Types of agreement

  1. Social / Domestic
  2. Commercial
• Social Agreements 


  Made between friends or family.

  Presumption: not binding
• Commercial agreements 


  Business agreements between companies and consumers

  Presumption: binding
• Evidence supporting social presumption

  • Closely related
  • Informal agreement - not written / signed
• Evidence rebutting social presumption

  • Formal agreement - in writing / signed
  • Parties on good terms but not close - not related
  • Some financial contribution with expectation of sharing
  • One party acting inequitably
  • One party risked financial security
• Jones v Padvatton [1969]


  Parties are closely related
• Balfour v Balfour [1919]


  The agreement was informal - not written / signed
• Merritt v Merritt [1970]


  Formal agreement - in writing / signed
• Simpkin v Pays [1955]


  Parties on good terms but not close - not related.

  Some financial contribution with expectation of sharing.

  One party acting inequitably.
• Parker v Clark [1960]


  One party risked financial security.
• Evidence supporting commercial presumption

  1. One party gains a clear commercial benefit
  2. Unfair to let a business make false promises
  3. Formal agreement - written and signed.
• Evidence rebutting commercial presumption

  • Clear terms and conditions indicate not binding
  • Terms indicated only binding “in honour”
  • Words are to provide comfort to the other party
  • UNCLEAR = evidence not strong enough to rebut presumption
• Esso v CCE [1976]


  One party gains a clear commercial benefit.

  Unfair to let a business make false promises.
• Rose and Frank v Crompton [1925]


  Formal agreement - written and signed.

  Contract stated in writing that it was an honourable pledge
• Jones v Vernon Pools [1938]


  Clear terms and conditions indicate the agreement is not binding.

  Coupon stated it was binding in honour only
• Kleinwort Benson v MMC [1989]


  Words before or in the agreement are to provide comfort to the other party.
• Edwards v Skyways [1969]


  If terms are unclear, the evidence is not strong enough to rebut the presumption.
• Sadler v Reynolds [2005]


  Whichever party wants the agreement to be binding has the burden of proving it was binding.