There
is a lot of academic controversy regarding whether or not the intention to
create legal relations should be regarded as a necessary ingredient in the
formation of a contract. This controversy, as previously stated is purely
academic. Under the common law the intention must be present. In commercial
transactions, the intention to create legal relations is presumed to be
inherent while it is arguable under domestic and intermediate situations.
In
discussing the intention to create legal relations, the following outline would
be used:
- Domestic agreements
- Commercial engagements
- Intermediate situations
DOMESTIC AGREEMENTS
It has
been generally held that agreements that are made in domestic situations have
no intention to create legal relations. Hence, they are not usually binding.
This was the decision of the court in the case of Balfour vs Balfour where the
court held that an agreement,where the husband promised to pay his wife a
monthly allowance of £30, had no intention to create legal relations and thus
couldn’t be enforceable by the court.
An
exception to this is a situation in which the contract is made when parties are
not in good terms. In the case of Merrit vs Merrit, it was held that a
contract, where the husband promised to pay a monthly allowance, contained an
intention to create legal relations and was binding. This is due to the fact
that the contract was made when both parties where separated.You can also see
the provision of S.42(1) of the Matrimonial Causes Act which states that
parties that are judicially separated can sue each other in tort and contract.
Also,
in a case in which one of the parties makes a very huge sacrifice in which it
would cause injustice not to enforce the agreement, intention to create legal
relations my be held to be present. For
example in the case of Parker vs Clark it was held that the plaintiff’s uncle
couldn’t evict him from his apartment after promising to accommodate him. This
was due to the fact that the plaintiff sold his own house due to the promise
and he also shared the bills with the family of the defendant.
COMMERCIAL AGREEMENTS
In
commercial transactions, it is automatically presumed that there is an
intention to create legal relations. However, in some situations this
presumption may be done away with. This applies in cases of a mere puff or when
the agreement explicitly excludes the enforcement of the contract by the court.
A mere
puff is a situation in which the promise made is one that cannot be reasonable
fulfilled because it is ludicrous. For example, an advertisement that any one
that takes a drink can outrun a cheetah cannot be enforceable if the
complainant couldn’t outrun a cheetah. This is due to the fact that it is not a
promise that can be fulfilled for one to
outrun a cheetah by just taking a mere drink.
The
second scenario is in cases in which enforcement in the court of law is
explicitly excluded. This is usually popular in football pool cases. For
example, in the case of Amadi vs Pool House Group & Nigerian Pools co, it
was decided that the defendant was under no legal liability towards the
plaintiff. This is regardless of the fact that the plaintiff allegedly won some
money. This is due to the fact that in the pool agreement, there was an honor
clause that excluded litigation and legal enforceability.
INTERMEDIATE SITUATIONS
Intermediate
situations are those which can neither be safely regarded as domestic nor
commercial. An example is a car run agreement in which different parents would
agree to take turns in carrying their children to school. They would agree to
contribute funds towards the fueling of the vehicle and other expenses.
An
example is the case of Coward vs Motor Insurers Bureau where the court held
that in situations such as these, the court should be reluctant to impute the
intention to create legal relations. The court would only enforce it where it
is expressly stated in the agreement that there is an intention to create legal
relations.
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