Intention to Create Legal Relations

Question 1

Bunn & Bunn v Rees & Parker

Answer 1

There is a presumption that commercial agreements intend to be binding upon the parties

Question 2

Rose and Frank Co v Compton Bros

Answer 2

Head clause denied intentions to be legally bound - sufficient to rebut presumption

Question 3

Smith v Hughes

Answer 3

Intention to be objectively ascertained

Question 4

Bowerman v ABTA

Answer 4

Unilateral offer was legally binding as the reasonable person would take it to mean the promise of a legally enforceable service

Question 5

Baird Textiles v Marks and Spencers

Answer 5

Objective assessment can rebut presumption to be bound - parties did not want a formal contract so as to retain flexibility

Question 6

Hedley v Kemp

Answer 6

Promise conditional on commercial success does not intend to be binding

Question 7

Licenses Insurance v Lawson

Answer 7

Statements made in anger may negate intention

Question 8

Leonard v Pepsico

Answer 8

Jest will negate intention

Question 9

Kleinwort Benson v Malaysian Mining Corporation

Answer 9

Comfort letters have no legal status

Question 10

Eccles v Bryant

Answer 10

‘Subject to contract’ clauses are not binding

Question 11

Barbudev v Eurocom

Answer 11

Agreements to agree are not binding as they are too uncertain

Question 12

Jet2Com v Blackpool Airport

Answer 12

Best endeavours clauses are binding where the object of the endeavours is certain

Question 13

Balfour v Balfour

Answer 13

No intention to create legal relations between married couples living in amity

Question 14

Jones v Padavatton

Answer 14

No ICLR between parent and child

Question 15

Merritt v Merritt

Answer 15

Can be ICLR between separating couples not living in amity

Question 16

Simpkins v Pays

Answer 16

Mutuality of obligations will imply ICLR

Question 17

Peck v Lateau

Answer 17

Previous conduct of the parties will imply ICLR

Question 18

Edmonds v Lawson

Answer 18

Whether parties intended to enter into legally binding relations is an issue to be determined objectively and not by inquiring into their respective states of mind

Question 19

Steinberg v Scala

Answer 19

Minors don’t have capacity to contract
Any contract may be ratified upon reaching majority
Contract is binding on the other party
If the minor rescinds the contract they will only be able to recover any money paid under the contract if there has been a total failure in consideration

Question 20

Nash v Inman

Answer 20

Contracts with minors for necessities are binding

Waistcoats were not necessities so no contract for minor to uphold

Question 21

Doyle v White City Stadium

Answer 21

Beneficial contracts of service are binding on minors

Question 22

Aylesbury v Watford Association

Answer 22

Beneficial contracts of service - look to holistic benefit to minor to ascertain validity of contract

Question 23

Proform Sports Management v Proactive Sports Management

Answer 23

Beneficial contracts of service are only valid if they confer a holistic educative benefit upon the minor

Question 24

Gore v Gibson

Answer 24

A person will lack capacity if unable to make decision for himself at the time of contracting i.e. through drunkeness

Question 25

Ashbury Railway Carriage and Iron v Riche

Answer 25

Companies can contract as legal personalities distinct from shareholders
Must act within the limits of the articles of association for contracts to be valid