Topic 4 - Contract Law (Intention)

What is a necessary requirement for a contract to be legally binding?

• Mutual friendship

• Intention to create legal relationships

• Verbal agreement

• Handshake agreement

Under the presumption for commercial agreements, how can a party rebut the assumption that the agreement is legally binding?

• By stating they never agreed to anything

• By showing evidence of a "binding in honour only" clause

• By proving they are friends with the other party

• By refusing to fulfill the contract

In the case of Rose & Frank Co v J R Crompton & Bros Ltd (1925), what did the court decide?

• The agreement was legally binding

• The agreement was only an honourable pledge, not legally binding

• The contract was invalid due to fraud

• The contract was enforceable in court

Which of the following is an example of a legally binding commercial agreement?

• A husband promising to pay his wife a monthly allowance

• A company signing a contract with a supplier

• A friend promising to lend another friend money

• A child promising to clean their room for an allowance

In Balfour v Balfour (1919), why was the husband not legally obligated to pay his wife?

• The contract was not in writing

• The wife did not sue in time

• The court ruled there was no legal intention in the agreement

• The husband was outside the country

How did the case Merritt v Merritt (1970) differ from Balfour v Balfour?

• The agreement was between business partners

• The agreement was made after separation, showing legal intent

• The contract was made with a witness present

• The agreement was never signed

In family or social agreements, what is generally presumed?

• The agreement is legally binding

• The agreement is only valid if signed

• The agreement is subject to government approval

• The agreement is not intended to be legally binding

Which of the following cases involved an agreement between friends to share a prize from a fishing competition?

• Rose & Frank Co v J R Crompton & Bros Ltd

• Jones v Vernon's Pools Ltd

• Welch v Jess

• Merritt v Merritt

What is the key factor in determining whether a social or family agreement is legally binding?

• Whether the agreement involves a large sum of money or commercial intent

• Whether the agreement was made between two people

• Whether the agreement was made in writing

• Whether the agreement was witnessed by a lawyer

Why was the agreement in Jones v Vernon's Pools Ltd (1938) not legally enforceable?

• It contained a "binding in honour only" clause

• The contract was signed under duress

• One party was a minor

• It was made verbally without witnesses