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Intention to create legal relation case list
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Syed LaraibINTENTION TO CREATE LEGAL RELATIONS
The courts will not enforce any contract unless it is clear that the parties intended to be legally bound by
their agreement. It is presumed that this is the intention in normal commercial contracts, and that it is
not the intention in respect of domestic and social agreements, but each of these presumptions is
rebuttable.
Balfour v Balfour [1919] 2 KB 571, CA
A civil servant D was about to return to his work in Ceylon, leaving his wife P in England. D promised to
pay P £30 a month until he returned, in exchange for her agreement to support herself without calling
on him for any other maintenance. They subsequently divorced, and P sought to enforce D's promise.
The Court of Appeal said that although there was consideration in P's promise, there was no contract.
There are many agreements, said Atkin LJ, including most agreements between husband and wife, which
the parties never intended they might be sued upon. Agreements such as these are outside the realm of
contracts altogether.
Jones v Padavatton [1969] 2 All ER 616, CA
A woman P made an offer to her daughter D, then in a well-paid job in the USA, that P would maintain D
if D came to England to read for the Bar. D agreed and moved to England, and began her studies. Two
years later P offered to buy a house in England, to be occupied partly by D and partly by tenants whose
rent would go to D in lieu of the maintenance payments, and again D agreed. The house was in P's
name, and three years later P claimed possession. The Court of Appeal said she should succeed; the
agreement between mother and daughter was a family arrangement not intended to be legally
enforceable.
Buckpitt v Oates [1968] 1 All ER 1145, Stephenson J
P and D were 17, and each commonly rode in the other's car. On one occasion, P was injured through
D's careless driving, and claimed against D's insurance. P had paid 10s [50p] towards the cost of petrol,
and it was necessary to decide whether there was a contract of carriage. The judge said there was not:
there was merely a friendly agreement to go on this particular trip, giving rise to no legal obligations or
rights except those which the general law of the land imposes.
Merritt v Merritt [1970] 2 All ER 760, CA
A husband H left his wife W and went to live with another woman. H promised to pay D £40 a month,
and they made a written agreement that in consideration of W's paying off the mortgage on their
jointly-owned house, H would transfer it to her sole ownership. The Court of Appeal upheld Stamp J's
ruling that this was a legally enforceable contract. In these cases, said Lord Denning MR, the court looks
at the situation in which they were placed and asks whether reasonable people would regard this
agreement as one intended to be binding.
, Simpkins v Pays [1955] 3 All ER 10, Sellers J
A football pool syndicate consisting of D, D's granddaughter G and D's paying lodger P won £750 in a
fashion competition in a Sunday newspaper. Each had filled in one line; the entry had been sent in D's
name, and it was G's selection that had won, but it was understood that whichever line won they should
share the prize equally. The judge said this was a binding contract, and P was entitled to one-third of the
winnings.
Rose & Frank v Crompton [1925] AC 445, HL
DD, who manufactured paper tissues, entered into an agreement making PP their sole agents in the USA
for a period of three years, subsequently extended to seven years. The agreement contained a clause
stating that it was not entered into as a legal agreement but was a definite expression of the intention of
the parties to which they honourably pledged themselves. Five years later, DD refused to supply goods
ordered by PP. The Court of Appeal said there was no contract. The House of Lords said there is a strong
presumption that commercial agreements are intended to be legally binding, but the wording of this
agreement made it quite clear that it was not so intended. The agreement was therefore unenforceable,
but orders placed and accepted under the agreement were separate contracts legally enforceable in
their own right.
Jones v Vernon's Pools [1938] 2 All ER 626, Atkinson J
The conditions of entry of a football pool competition stated that the sending in of the coupon should
not give rise to any legal relationship, and that the arrangements of the pool were binding in honour
only. P claimed to have sent in an entry but DD denied having received it; it was conceded that had it
been received it would have won a prize. The judge said the agreed conditions prevented P from
succeeding in his claim; there was clearly no intention to create legal relations, and it was consequently
unnecessary to decide the issue of fact.
Edwards v Skyways [1964] 1 All ER 494, Megaw J
An airline DD found it necessary to make some pilots redundant, and P was among those given notice in
accordance with his contract. After discussions with the relevant trade union, DD agreed that pilots
made redundant would each receive a certain ex gratia payment. P subsequently sued for this payment
(for which it was conceded he had given consideration) but DD claimed the agreement was not intended
to be binding. The judge said that since it related to business matters DD had the burden of showing that
it was not, and they had not discharged that burden. The use of the words "ex gratia" he took to mean
simply that DD did not admit any pre-existing liability, not that their promise once accepted should have
no effect in law.
Esso Petroleum v Customs & Excise [1976] 1 All ER 117, HL
A petrol company AA offered a free "world cup coin" to any motorist buying four gallons of petrol, and
millions of such coins were distributed; the Excise claimed that these coins were being sold and so were
liable to tax. The Court of Appeal held (as a matter of common sense, per Lord Denning MR) that the
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