Intention to Create Legal Relations Flashcards
(4 cards)
Which of the following statements is correct in relation to intention to create legal relations (ICLR)?
(a) ICLR is determined by taking evidence from the parties as to what was in their minds when entering the contract.
(b) ICLR is presumed to exist in commercial situations and it is impossible to rebut that presumption.
(c) ICLR is presumed to exist in commercial situations but presumed not to exist in domestic or social situations.
(d) ICLR is presumed to exist in all situations unless one of the parties can show that there was no intention to be bound.
(c) ICLR is presumed to exist in commercial situations but presumed not to exist in domestic or social situations.
Note that presumptions can however be rebutted.
A group of four friends agree to perform a comedy routine on the streets of Edinburgh during the Edinburgh Festival, asking passers-by to contribute money, to raise their profiles as aspiring actors and comedians. They all work on the routine, but only two people are needed to perform it, and they vary who performs it from day to day. Prior to the start of the festival, they all signed a written contract indicating that all contributions from passers-by would be shared equally between them at the end of each day. One of the friends refuses to contribute the money he collects to the pool of contributions to be shared.
Which of the following best explains whether the agreement between the friends is likely to be enforceable?
(a) No, because although this is a commercial / business agreement, the usual presumption of an intention to create legal relations is rebutted because the group are friends.
(b) No, this agreement is unenforceable as the cost of bringing the matter to court would likely be more than any award of damages a court would make.
(c) No, because this is an agreement between friends and there is nothing to rebut the presumption that there is no intention to create legal relations.
(d) Yes, because although this is a social / domestic agreement, the usual presumption of no intention to create legal relations is rebutted because the friends intend to make money.
(e) Yes, because this is a commercial / business agreement and there is nothing to rebut the presumption that there is an intention to create legal relations.
(e) Yes, because this is a commercial / business agreement and there is nothing to rebut the presumption that there is an intention to create legal relations.
The nature of the agreement appears to be commercial / business, and there is nothing to rebut the presumption of ICLR.
In which type of agreement is intention to create legal relations presumed to exist?
(a) Unilateral agreements
(b) Bilateral agreements
(c) Domestic agreements
(d) Commercial agreements
(d) Commercial agreements
Two companies agree the sale of a house ‘subject to contract’. What does the phrase ‘subject to contract’ imply?
(a) The companies have agreed a binding contract.
(b) The companies are taking advice on the subject matter of the contract.
(c) The companies do not intend to be bound until they sign a formal contract.
(d) The companies have signed a contract and are bound.
(c) The companies do not intend to be bound until they sign a formal contract.
The phrase creates a strong inference that the companies do not intend to be bound until the execution of a formal contract.
