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Intention To Create Legal Relations

intention to create legal relations

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Sahil Ahmed Tunio
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37 views2 pages

Intention To Create Legal Relations

intention to create legal relations

Uploaded by

Sahil Ahmed Tunio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Intention to create legal relations:

 Third requirement for establishing a contract.


 Rebuttable presumption: a conclusion drawn by court unless the
opposite is approved. Two rebuttable presumptions operate in
relation to the requirement that a contract must be supported by an
intention to create legal relations.
 First presumption deals with social and domestic agreements which
is presumed that there is not an intention to create legal relations. For
example: I promise my daughter to present him some amount of
money, this may not lead to intention. The case authority for this is
Balfour vs Balfour (1919). The wife sued when the husband did not
give the required amount while he was working aboard and it was
their promise, but as of now the conditions have been changed, they
are separated and at the time when the agreement was made there
were married.
 The case of jones vs padavatton (1969) illustrates the general prop as
well. Mother promised for 200 for maintenance. And arranged her
home so that she could easily live there. But after more than one
unsuccessful attempt at passing the exams. So, the mother wanted
possession of the home. The daughter relied upon agreement of
mother as defense. The question was whether this agreement meant
to be legally binding. The court of appeal held that it is assumed that
agreement between family members domestic or social arrangement
like this is not intended to create legal relations. So was not binding on
the mother.
 These both can be rebutted, through the evidence and such evidence
was relied upon in Rademacher vs granatino (2010) was a case
involving prenups, prenuptial agreement, which is agreement
between parties in advance of getting married. In the case, the
supreme court said that the husband was not entitled to award of 5.5
million after the breakup of marriage because the award would give
insufficient weight to prenuptial agreement. This agreement
acknowledged that neither party should acquire any benefit from
others property during their marriage. The presumption was rebutted
as supreme court must give some weight to prenuptial agreement.
 Similarly in the case of meritt vs meritt (1c970), there was rebuttal of
unusual presumption, the agreement was found somehow different
from Balfour to Balfour unlike them the agreement when both parties
have already been separated. It was said that it would be enforceable
because their intention at that point would be more likely that they
wanted the agreement to be binding.
 Second presumption operates in relation to commercial agreements
which is there is intention to create legal relations. The second
presumption operates in relation to commercial agreements. It's the reverse.
Here, in the case of commercial agreements, it is presumed that there is an
intention to create legal relations. This is particularly strong, this presumption
when an agreement is reached int he context of an ongoing employment
relationship. An agreement as to how a bonus pool is going to be distributed
between an employer and an employee will fall within the general rule, and
the presumption will be that a statement of intention, a statement as to how
the employer intended to apply that bonus pool was meant to be
contractually binding. It can be rebutted.

 In a slightly surreal case, blue v Ashley involving Mike Ashley, the former
owner of Newcastle United Football Club, the claimant said that he was owed
£14 million by Mike Ashley under an oral contract he entered for business
services. It was a contract he alleged that he entered with Mr. Ashley while
they were drinking in a pub. Mr. Justice Leggatt relied upon the unusual
location, the general atmosphere of the meeting place as well as a lack of
certainty and definiteness to the agreement to say, "Okay, an agreement
between two business partners would normally be intended to be legally
enforceable but the usual presumption is rebutted by those circumstances."

 The usual presumption could also be rebutted by express words. The case of
Kleinwort Benson v Malaysia Mining involved an undertaking by a parent
company given in respect of a subsidiary company, and this undertaking took
the form of a comfort letter. What we mean by a comfort letter is, we mean
an express assurance which by its own terms makes clear that it is not
intended to be legally binding. A parent company might say, "It is our usual
practice to ensure that our subsidiary company is supported by us but we
make clear that on this occasion, this is not a legally binding commitment."
Such an undertaking is sometimes called a comfort letter, and it is the
explicit rebuttal of the usual inference, the explicit undertaking that this is
not meant to be legally enforceable which disables the normal presumption.

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