Intention To Create Legal Relations (ITCLR)

• When it is unclear whether the agreement is a domestic or business agreement, the burden of proof lies with the claimant to prove there was an intention to create legal relations
• Business agreements

  • Presumption - There is an intention to create legal relations
  • The presumption can be rebutted if there is no intention to create legal relations
  • The intention can be express or implied
• Business agreements

  • Binding in honour only: This means that agreements are not contractually enforceable - Jones v Vernon Pools
  • When a free gift/prize is offered in order to promote a business, this can be legally binding - McGowan v Radio Buxton
  • Letters of comfort: These are not legally binding - Kleinwort v MMC
• Social/domestic agreements

  • Presumption - There is not an intention to create legal relations
  • The presumption can be rebutted if there is an intention to create legal relations
  • The intention can be express or implied
• Social/domestic agreements

  • If an agreement is made after marriage, there is not ITCLR - Balfour v Balfour
  • If an agreement is made after separation, there is ITCLR - Merritt v Merritt
  • Prenuptial agreements are legally binding - Radmacher v Granatino
  • When families make agreements that appear to be business agreements, the court has to assess whether there is ITCLR - Jones v Padvatton
  • Lottery syndicates: If money has been paid, it is more likely to be a business agreement - Simpkins v Pays
  • If parties put their financial security at risk, there is usually ITCLR - Parker v Clarke