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Chapter 4 - Intention To Create Legal Relations

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52 views

Chapter 4 - Intention To Create Legal Relations

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Bosin Nhi
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CHAPTER FOUR Intention to Create Legal - Relations 1 General [401] Intention to create Joga! relations an cssential element. Consideration and intention to create legal relations are interrelated, the ‘former tending to suggest the presence of the later, Does the furnishing of ‘consideration, a8 Wiliston argued,! import an intencion thatthe promise 50 ‘bought’ be legally binding and so render euperiivous en independent requirement that the later element exis? Conversely, is considerstion merely one form of evidence of intention to create legal relations not ‘warranting the status ofan independent clement of «contract? The later question was answered ‘no’ at an easly stage? The former question it ‘answered ‘not in this chapter. Therefore, in addition to agreement and ‘consideration, a third element is necessary to « contract: an intention 1 ‘create legal relations? Since @ contract isa ‘legally binding agreement it would be paradoxical if en agreement could be held « contract in the face of the: parties intention that it should not give rise to legal rights and obligations. A ‘coramon positive intention not ro contace wil be respected, However, the ‘requirement docs not mean theta party secking to enforce a contract sist show that the parties consciously adverted t0 the legal implications af What they were doing. Moreover, the test of intention is objectivet and t is not usually open to one party to prove that subjectively « wndateal Sntention was that legal relations should not arte? In practice, the ise of intention to ereate legal relations docs not often trie and, apart from the uncommon cases where the pertca tases that their agreement is not to attract legal consequences the faoue. it termined as an inference of fact inthe drawing of which two rebuttable presumptions offic,’ based on common experience, play @ Part, eee 1 Wit on Conrace, re Vo $21. 2 See et 3 SEHK Lace, The Inomon so Crene Leg Reto (1970) 3 Ad 2418, See tops 5 efifon, Sete 7 Se (3), 403), 156 INTENTION TO CREATE LEGAL RELATIONS tao [doa] Tatention may be express or implied, The relevant intention [hay be exprsse or implied.* In the cage of consensual felations between ‘ove frends oF members of a family, it will be more easly inferred that Specment and consideration vere not accompanied by contractual intent ‘Ban it wil be i the cate of partis at arm's length, and in particulars the case of commercial agreements, But the question remains one of the ‘tention, express or implied, on the facta ofeach case? J akhough the requirement of intention ie of general application, itis “onveniont to consider the cases in clases, 2 Family, Social and Domestic Agreements [03] Prosumption that such agreements held not binding. perience of life shows thet close relatives do-not usually intend dhe various arengements which they make to create legal relations atid that they prefer to rely on ‘family tes of mutual trust and affection’ So, the law recognises a rebuttable presumption of fact that relatives, suck te ‘usband and wife and pareat and child, do not intend their agecments to ‘be contracts. The justification for he presumption does not exist and $0 the presumption doce not arise (or is rebutted) where husband and wife Inve cered living in emity and hve separated or are about to separate at the time ofthe making ofthe agreement." Tn the leading case, Balfour Bajo! « wife could not, for medical reasons, accompany her husband fom England back to Ceylon (his place of employment) and he oraly promised to pay her an allowance of £30 per month until ee could rejoin him. This promie was held not binding for lack of an intention that the ‘understanding should be legally enforceable. Atkin LJ said: tere ace agreements benveen pares which do not ret in contacts ‘inthe meaning of chat term in our law. The ordinury ample whete ‘vo pari agre to tke a walk together oc where there ean ofr and at sceeptane of howpitlty. Nobody would suggest in ordinay circumstances that thowe agreements ces in what we know asa conta, ad one ofthe ‘moet ual forms of agceement which doesnot conta ntret spots {ome m be the arageren which are made between hibund end wilt 1 quite common, sod it ie the natural and inevtabe taut of the tcatinship of Iusband and wife, that the two spouses should make strangemers berweentbemeetves. thor agreements, oe meny of therm do ‘ot erin contract at al and ty do nt et in contacts eventhough ‘exe may be whet as between other pares would const consdertion forthe agreement... It constant happens think, at auch sengements ‘mae between husband and wife are srengements in which there se ual Domes, oc in which sete is consderson inform within the dfinion ‘hat have mentioned. Nevertheless they ae not cure, ad they ere Not 8 Senos Deuce Schaskbawand Titan milf» Set tematinl Pere {Gola 1990] AC 295 318 Goede nh pat 359), 0 Se di Gat Laks Fy Lad v AS Bap Ht Py La (108) 2 NSWLR 200 SBA Ori Ine Co Pe Spe reece Pe 193} 1 Lays Rep 2393 40 Jn» Pavan 969) 2A ER 6164 621 pe Sion Ld. 1 Mea Mara (1970 2 AUER 18, wisp aRe sn B hese as von FORMATION OF CONTRACT ‘contacts because the pers did no intend tht they shouldbe attended by legal consequences 1a Cohen v Cohen, Dizon J, by similar seasoning, held an arrngemeng between an intending husband end wife as to a dress allowance to the ° laste nox» contac. After refering to question of consideration, te af the Stata of Pra 1671 Gn, besa at hese mater onl ari the aengenns whch he pif mae wi ‘the defendant was intended to aflect or give rise to ep reason ‘or to be, ‘cad with Jel comeabences alr Bob fone Penh Gb I Crono & estat hk we ot eae Te pres fc mores my em, than its an cnou open he Bee tlotace tote wit as sm ehh Sy Coico apropeate whee ‘Sracnoancs a etme ef nce Although itis right for the courts to exercise 4 degree of vigilance ia string thatthe courts are nat uted a a forum for purely vince igation in relation to agreements which no reasonable person Would regard as having the force of lnw, itis by no means cleat thst che seme Sections would be reached today. Normal court procedures exist to dea with vexatious litigants, and the courts must be carefll t0 see that agreements which are intended to be taken eeriourly are observed, To leave the wife in Balfour © Balfour without a means of supporting herelt Scome entirely unjustified end smacks of bias against maried, women. ‘Moreover, as has been pointed out, Arkin LJ failed to distinguish arly social promise — the acrangement for s walk — which is not Intended to be enforceable, from a ‘benevolent’ promise contemplating reliance ofa serious or injurious kind, In Foner» Padavatton"® sn arrangement was reached between a mothe: and her 34-year-old daughter that the mother would maintain ber at t specified rate if she would go to England and reed forthe Ber with a view to practising later in Trinidad. "This arrangement necessated the daughter's abandoning a comfortable flat and a secure remmuncraive job in ‘Washington aod her seven-year-old son’s education there. After her cereal in England there was 2 variation to the arrangements under which the ‘mother purchased a house in which che defendant could live, Rooms were Jet to tenants, but none of the rental payments were remitted to the ‘mother, who was paying off a substantial morteage. The English Court of Appeal held that there wes no intention to be legally bound. The cou Wwas influenced by stements of uncertainy in the atrangements with respect to the house. But it may be asked whether iis today appropeate to treat such an arrangement at attracting & presumption that there was 09 inention to create legal relations. After al, the daughter did mot live with Iner mother, was well above the age of majority andl had a fasrily of het 3s uray eecixes 1e foie) 2 kas 1 (1929 2 201 20m (19051 AC 44, 18 Sam Sa Exonng enon Poni (190) 12.5 7 18D 39 Gt Gol Gini [1970 1 QD 295, 156 INTENTION TO CREATE LEGAL RELATIONS 001 seta af the preumgtn, I. my cee spoon {got Resa and le Rave been upd as contac, for ample, Se a a mala ty wipunt for maintenance and to indemnify as part of 2 compromise of aoe ee er Jigadon turn to live with her husband in consideration of the husband's a ” ‘Other cases have involved promises, usually by an clderly or disabled ir ire ed ps a a cae ce ee ee ae tp eeence wih the promior andlor rendering of pong so render ce ne ee hae hours a eplepentaan of hc erengement wil invare the promisce’s Se eons Fa an ee ae a tos et es 3 Commercial Agreements Presumption that parties intend to be legally bound. tt Iter war was east Sbowe™ that in commer agreements fete copan fo besa het the arr i oe end ek Begnent tbe ntended Sy egel consequences Only rary wil he sescmpion be rbuted, andthe eras of exabiahing tat a etmmercel Meeament was not to"crexe legal relaons res on the ary 80

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