Intentions to create legal relations

Front

What is the second requirement of contract formation?

Back

The second requirement for contract formation is that the parties must intend to create a legally enforceable arrangement.

Front

What has been the traditional approach on this topic?

Back

It was traditionally held that social and domestic agreements (i.e. agreements between family members/friends in social situations such as over dinner) were not legally enforceable. This is because it could not be said that the parties intended to create legal relations.

Front

Has this traditional approach been counter-acted? Why/why not?

Back

In the case of Flemmings, the court held that the presumption that agreements between parties who have a personal relationship, have no intention to be legally binding is wrong.

Front

How must the courts assess, as to whether or not the parties intended to create legal relations?

Back

In the case of Flemming, the court held that we are not interested in what the parties actually intended, what we are interested in is what a reasonable person (bystander), thinks the parties intended.

Front

Which party has the burden of proof, of proving that the second criteria of contract formation is met? Why?

Back

In the case of Flemmings, the court held that the responsibility for proving that an arrangement (between two parties, who have a personal relationship) has the intention to create legal relations, is on the plaintiff.

Front

Give an example of an arrangement between two parties (who have a personal relationship), being legally enforceable, using case law.

Back

In the case of Parker, the court held that passing on property through a will is an example of an arrangement between two parties (who have a personal relationship), being legally enforceable.

Front

Give an example of an arrangement between two parties (who have a personal relationship), being legally unenforceable, using case law.

Back

In the case of Jones, the court held that because the arrangement here was not in writing and because it seemed flexible and uncertain, due to the mother changing the arrangement halfway through, it was not as ridged as it should have been, and so there was no intention to create legal relations here, therefore the contract was legally unenforceable.

Front

Give a second example of an arrangement between two parties (who have a personal relationship), being legally unenforceable, using case law.

Back

In the case of Maybon, the court held that volunteers who have an employment contract with a charity, may meet the second criteria of contract formation, unless the charity (the offeror) specifically states that such an agreement between the volunteer and the charity, is not an employment contract. In such cases, it does not matter, whether the volunteer is taxed on his income, generated from the charity, that statement by the charity conveys, that the parties are not intending to create a legally enforceable arrangement!

Front

Give a third example of an arrangement between two parties (who have a personal relationship), being legally unenforceable, using case law.

Back

In the case of Crompton, the court held that an 'honour clause' meant that the parties are not intending to be legally bound, just bound by honour. Because of this, the arrangement was not legally binding on the parties.