Contract seminar 13- intention to create legal relations 1. What are the basic presumptions in relation to intention to create legal relations? In domestic and social transactions, there is a presumption that agreements are not intended to be legally binding. In commercial transactions, there is a presumption that legal relations are intended. 2. What is a rebuttable presumption? is an assumption made by a court, one that is taken to be true unless someone comes forward with evidence to contest it. 3. Why should an agreement within a family not be legally binding? The promises are trivial. Domestic/social promises should not be subject to an intrusive legal process. Court system could not withstand the amount of cases which might arise if domestic promises resulted in binding contracts. 4. When might a husband be bound by an agreement with his wife? Pre-nuptial agreement Ownership/tenancy of the matrimonial home Bank accounts Other assets. 5. Consider whether there is an intention to be legally bound in the following situations: (a) Agatha promises to pay her daughter, Beatrice, £20 per week if she will do the household cleaning. Beatrice keeps her side of the bargain, but after five weeks Agatha has only paid Beatrice £10. There is no intention to be legally bound. Balfour v Balfour- husband promised to pay his wife a monthly allowance. Jones v Padavatton- Mother promised her daughter $200 maintenance a month if she quit her job in America and read for the bar in England. (b) Carl agrees to pay Joe, his co-worker, £50 for filing some official documents. (c) David agrees to take his secretary Ellen out for a meal for getting an urgent job finished quickly at very short notice. There is no intention to be legally bound. This exchange would be deemed a social transaction and not a contract. (d) Felicity asks her daughter Gail to give up her part-time job for a week to proof read a draft of her romantic novel with a promise to pay her. There is no intention. Consideration of relationship at time.
6. Harry offers to pay £100 to anyone who completes the local village half marathon. The following are running the marathon: (a) his ex-wife, Jane, who he detests (b) his nephew, Liam, who he had never met before (c) his god-daughter, Marie, who visits every summer Advise Harry as to whether or not, the payment can be legally enforced if the above persons were to complete the half marathon Letters of comfort- Kleinworth Benson Ltd v Malaysia Mining Corp (1989) · used by businesses and frequently framed in ambiguous language · Aimed at encouraging a lender to advance funds to a third party Letters of intent- RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH (2010) . Work began and progressed on the basis of a letter of intent. · Original negotiations were said to be 'subject to contract', but the Supreme Court highlighted that any intention not to be bound before signatures on a contract could be