TOPIC 3(Intention to Create Legal Relations ). 04/04/2017

TOPIC 3(Intention to Create Legal Relations ).   04/04/2017

Any agreement made between the parties (proposer and acceptor) will only become a binding contract if both parties intend to make the contract enforceable. In determing whether there is an intention by the parties to create a legally binding contract ,the law has divided an agreement into two categories :

(a)    Domestic ,family and social agreements and

(b)   (b)Business agreements .

In domestic,family and social  agreements ,presumption made is that the parties in the contract do not intend for their agreement  to create legal relations .This means that the parties to the agreement do not contemplate any legal consequences to arise from their agreement .It is because this type of agreement is made every day between the family and social members and and between spouses for many arrangements ,that no party would intend to go to court for breach of such arrangements and promises made . 

Example : In the case the husband ,was employed in a government post in ceylon. He returned with his wife to England on leave ,but she was unable go back to Ceylon with him for medical reasons .He consequently promised orally to make her an allowance of  €30 a month until she rejoined him .The husband failed to make the payment and the wife sued him. The court held that although it Was not impossible for a husband and wife to enter into a contract for maintenance ,in this case they never intended to make a bargain which could be enforced  in law. Thus  ,there was no enforceable contract between the parties.

Therefore ,in the above case ,that involved husband and wife ,there is a presumption of no intention to create legal  relations .However if the presumption can be rebutted on the evidence that there was a serious intent ,then a different situation will  appear.For example,where a husband and were living together but in amity or were separated when the agreement was  made ,the court  may enforce the agreement .

Since,the  true intention of the parties may inferred from the language they use ,it is important the         words used by the parties are certain .If the words are uncertain ,then the agreement will not be enforced because the uncertainty may lead to the conclusion that there is no intention  to create legal relations .

Example of uncertain case is like this : In this case ,a contractual intention was negatived  when a husband (who was leaving his wife )undertook to pay her £15 per week “so long as I can manage it The word “so long as I can manage it “

 in this case was considered as uncertain and does not create an intention to enter into a legally binding contract .

Selef-check :

1.How does the law determine of an intention in any agreement between two parties ?

2.What is the presumption on intention to create legal relations in  a domestic,family and social agreement.

3.Must the words used by in their arrangement be certain and unambiguous ?

Activity 3.1

Discuss the following problems by applying the principle of law on intention to create legal relations . (a)Three sisters ,Viv,Valerie and Victoria ,agree to form a syndicate (A group of people or business companies combined to pursue a common interest)for the purpose of making a weekly entry in a fashion contest in a local newspaper .Viv and Valerie do not know much about fashion and give Victoria $7.00 each week. Victoria fills in and sends off the contest forms every week and she always fills the forms in her own name .After one month, one the entries that Victoria sent won a $10,000 prize. Viv  and Valerie are very happy to know about the news and want to claim their share . Victoria now refuses  to share. Advice  Viv and Valerie. (b)Mr. and Mrs, Alan are husband and wife .Lately ,they quarreled over the week because Mr. Alan was very busy with his business trips and had no time for a vacation with Mrs. Alan . Mrs. Alan had expressed her intention to go back to her hometown if the situation remained the same . After a serious of arguments ,Mr. Alan , promised her that if he got a new business offer,he would take her Holand for a vacation . Mrs. Alan was very happy and gave up  her intention to go back to her hometown .Two months later ,Mr. Alan  was offered a new business contract  and Mrs. Alan Wanted to enforce the promise made by her husband .Explain whether she will succeed in her claim.