intention

• Legally binding arrangement


  Rights and obligations of the agreement are enforceable
• The law will make a presumption based on the surrounding setting and context of how the contract was made
• Evidence can rebut this presumption
• Presumptions


  • Business agreement: Presumption is that it does intends to create legal relations
  • Social/domestic agreements: Presumption is that it doesn't intend to create legal relations
• Business agreements


  • Presumed to be legally binding, but evidence can rebut this
  • The burden of proof will be on the party claiming that there is no intention
• Business agreements


  • JONES V VERNONS POOLS (1938) - If a contract is stated to be 'binding in honour only', there will be no intention to create legal relations
  • EDWARDS V SKYWAYS LTD (1969) - Ex Gratia payments are voluntary and so do not show intention on it's own. However, a business agreement to make an ex gratia payment is evidence of intention
  • ESSO PETROLEUM CO LTD (1976) - Esso were using this to gain more business from the promotion and so there was intention to be bound by the agreement
  • MCGOWAN V RADIO BUXTON (2001) - C entered a radio competition for which the prize was said to be a Renault Clio. C won the Clio, except it was a 4 inch scale model of the car. Held: Following Esso Petroleum, there was intention to create legal relations
  • KLEINWORT BENSON LTD V MMC (1989) - Letters of comfort are not intention to create legal relations
• Social/domestic agreements


  • Presumed not to be legally binding (no ICLR)
  • The more domestic the agreement, the less likely the courts will presume there was ICLR
  • Whether there is ICLR in domestic arrangements will depend on the facts
  • Evidence of an agreement made during a close relationship will be evidence of NO ICLR
  • Social agreements where money changes hands will be construed as a business agreement, with ICLR
• Social/domestic agreements


  • BALFOUR V BALFOUR, MERRITT V MERRITT - The more domestic the agreement, the less likely the courts will presume there was ICLR
  • JONES V PADAVATTON (1969) - Whether there is ICLR in domestic arrangements will depend on the facts. Evidence of an agreement made during a close relationship will be evidence of NO ICLR
  • SIMPKINS V PAYS (1955) - Social agreements where money changes hands will be construed as a business agreement, with ICLR
  • WISLON V BURNETT (2007) - The continuous query provided evidence that there was no ICLR
  • PARKER V CLARKE (1960) - If parties put their financial security at risk for an agreement, then there must have been ICLR
• Ex Gratia payments


  payment to someone with injury or loss finance