CFAB: Consideration_Intention to Create Legal Relation

22 Mr and Mrs Higgins own two flats in Bristol which they let to students. When their eldest son, Crispin, was offered a place at Bristol University to read Law, he and his parents entered into a tenancy agreement allowing him to reside at one of the flats during his university studies for a rent of £190 per month. He was allowed to sublet the second bedroom for a rent of £200 per month. In the light of the rebuttable presumption that no intention to create legal relations exists in the case of a family, social or domestic arrangement, which of the following statements best describes the legal position as to whether the necessary intention to create legal relations exists in this instance?

• A No, because it is a family or domestic arrangement and so no such intention is presumed
• B No, because the fact that Crispin pays a reduced rent is evidence that no such intention exists
• C Yes, the normal presumption in family arrangements is rebutted by the fact that the parties enter into a written agreement and rent is payable
• D Yes, because the normal presumption does not apply where the arrangement relates to property

23 Are the following statements true or false?There is a rebuttable presumption that social, domestic and family arrangements are not intended to be legally binding.

• A True
• B False

23 There is an irrebuttable presumption that parties to a commercial agreement intend it to be legally binding.

• C True
• D False

24 Which of the following statements best describes consideration?

• A Consideration must be adequate and sufficient
• B Consideration must be adequate but need not be sufficient
• C Consideration must be sufficient but need not be adequate
• D Consideration need be neither sufficient nor adequate

25 Can the following constitute valid consideration?The payment of £1 per year as rent for a house

• A Yes
• B No

25 Can the following constitute valid consideration? A promise by Adam not to pursue his action for breach of contract against Ben, if Ben agrees to do Adam's accounts for him for 12 months without charge

• C Yes
• D No

26 Zoe was employed to give one lunchtime recital per month at a prestigious eating venue in London. Her contract contained a provision that she would stay behind and meet with appreciative members of the audience after the recital, as part of the venue's aim of making music more accessible and less elitist. After about 18 months, Zoe's recitals had become very popular but she was always keen to get away quickly after each performance. The manager offered her £50 (on top of her recital fee) if she would stay behind and meet with appreciative members of the audience for up to an hour after each recital. Can Zoe enforce the promise to pay her the extra £50?

• A Yes. It is a fresh promise that the manager chose to make
• B Yes, because the contractual provision had become redundant through its non-observance
• C No, because she was obliged to perform that duty anyway
• D No. It was simply a goodwill gesture and is not intended to be legally binding

27 Zak owes Eve £100. Finding that he has insufficient cash, Zak offers Eve his bicycle worth £90 instead. Eve accepts. Which of the following statements best describes the legal position as to whether there is valid consideration?

• A Yes, Eve was not already entitled to the bicycle so it is sufficient consideration for waiver of the debt
• B No, the bicycle is not sufficient as it does not match or exceed the value of the debt
• C No, consideration must be in money or money's worth
• D Yes, a bicycle constitutes sufficient consideration because it has an identifiable value

28 In which of the following scenarios is there insufficient consideration for a waiver of rights by Oscar where Humphrey owes him £1,000 to be paid on 13 May?

• A Oscar agrees to accept a car instead
• B Oscar agrees to accept £980 on 13 May in cash
• C Oscar agrees to accept £980 from Humphrey's sister in full satisfaction of the debt
• D Humphrey agrees to pay Oscar £700 on 1 May

31 In relation to the intention to create legal relations:The parties to a social or domestic agreement are presumed to have intended the agreement to be legally enforceable, although this intention is rebuttable.

• A True
• B False