Intention to create legal relations

Question 1

Balfour v Balfour (1919)

Answer 1

Facts: husband and wife with oral agreement, presumption applied
Held: the action failed as this was only a domestic agreement and parties did not intent to be bound, courts have no place in domestic agreements

Question 2

Merritt v Merritt (1970)

Answer 2

Facts: husband and with a written agreement, robut presumption
Held: parties intended to be bound and the marriage was beyond repairs when the agreement was made. Lord Denning said that presumption against intention did not apply when the parties were not living together in amenity

Question 3

Jones v Padavatton (1969)

Answer 3

Facts: parent and child
Held: agreements were not intended to be bound as it was a mere family arrangement, agreement was too vague and uncertain; the mother was entitled to possess the house due to no contract

Question 4

Simpkins v Pays (1955)

Answer 4

Facts: a shared cost of newspaper competition entries between parties and an agreement to split winnings
Held: winnings must be shared as lodger presumption was rebutted, the presumption did not apply, all entered the competition that any price would be shared

Question 5

Parker v Clark (1960)

Answer 5

Facts: elderly relatives lived together, with detailed arrangements of what would happen if the party died
Held: arrangement was binding as their arrangement was so detailed regarding housing expenses. The Parkers had relied on the agreement by selling their home and lending daughter money

Question 6

Buckpitt v Oates (1968)

Answer 6

Facts: friends who car shard and paid petrol
Held: despite the contribution of fuel, this was a friendly agreement or ‘gentleman’s agreement’ to go on the trip which gave no rise to legal obligations or benefits

Question 7

Jones v Vernon’s Ltd (1938)

Answer 7

Facts: claimant sent in his coupon of winning 8 pools, but the defendant never received this
Held: clause/condition put into terms and conditions prevented any action relating to pools coupon, there was no intention and the presumption was successfully rebutted

Question 8

Edwards v Skyways Ltd (1964)

Answer 8

Facts: claimant was asked to take early retirement and offered to either withdraw total amount when he reached 50 or withdraw total amount he had paid so far and ex gratia payment equal to his contributions
Held: Ca rejected this stating it was a commercial agreement so presumption was to create legal relations, the phrase was ambiguous and the court emphasized the heavy burden on any party claiming the presumption is a commercial context had been rebutted

Question 9

Kleinwort Benson v Malaysian Mining Corporation (1989)

Answer 9

Facts: comfort letter given to the claimant about a subsidiary company
Held: the wording of the comfort letter did not amount to a promise, the CA stated although this was a commercial agreement, the presumption was successfully rebutted, if the bank wanted a guarantee, it should have insisted for one

Question 10

Esso v Commissioners of Customs and Excise (!976)

Answer 10

Facts: free coins were given away with petrol as part of a sales promotion
Held: since Esso was clearly trying to gain more business from the promotion, it was held that there was an intention to be bound by the agreement; offer of ‘free gifts’ to promote the business can be legally binding

Question 11

McGowan v Radio Brixton (2001)

Answer 11

Facts: claimant won a car, but it turned out to be a four inch model, defendants argued there was no legally binding contract
Held: the judge held hat there had been legal intent. The claimant entered the competition as a member of the public and that ‘looking at the transcript of the broadcast, there was not even a hint that the car would be a toy’.