We will delve into the fundamental concept of the doctrine of intention to create legal relations, which serves as a crucial element in the formation of legally binding contracts. While some critics argue against its necessity, this doctrine plays a vital role in ensuring that parties are bound by ...
“The doctrine of intention to create legal relations adds an unnecessary
requirement for the formation of a contract.”
The doctrine of intention to create legal relations is an essential element in the formation of a legally
binding contract. It requires that the parties involved in a contract must have the intention to enter into a
legally binding agreement. While some argue that this doctrine adds an unnecessary requirement, it serves
an essential function in ensuring that parties are bound by their contractual obligations.
One argument against the doctrine of intention to create legal relations is that it creates an additional layer
of complexity in the formation of a contract. Opponents of the doctrine argue that if the parties have
reached an agreement, then they should be bound by it, regardless of whether they intended to create legal
relations. However, this viewpoint is flawed, as it ignores the fundamental principle of freedom of
contract.
The principle of freedom of contract allows parties to enter into agreements on their own terms, with the
assurance that the terms will be legally binding. If there was no requirement for intention to create legal
relations, parties could engage in casual discussions, and agreements that were not intended to be legally
binding could be mistaken for contracts. This would undermine the certainty and predictability of the law
and could lead to legal disputes.
The classic case of Balfour v Balfour (1919) established the doctrine of intention to create legal
relations. In this case, the husband had promised to pay his wife a monthly allowance while he was away
working in Ceylon. However, when he returned, he failed to honor this agreement. The court held that
there was no intention to create legal relations between the parties, and the agreement was not
enforceable.
Since Balfour v Balfour, the courts have applied the doctrine of intention to create legal relations in
various contexts, such as prenuptial agreements, domestic cases, and commercial agreements. In domestic
cases, the presumption of enforceability has been used to determine whether an agreement is intended to
be legally binding. For instance, in Soulsbury v Soulsbury (2007), the court presumed that a husband's
promise to pay his wife a weekly allowance was not legally binding. Similarly, in commercial cases such
as Kleinwort Benson v Malaysia Mining (1989), the court held that the parties intended to create legal
relations, and the promise to pay was enforceable.
Recent cases, such as Jones v Padavatti (2014) and Wilson v Burnett (2015), have highlighted the
importance of the doctrine of intention to create legal relations. In Jones v Padavatti, the court held that
there was no intention to create legal relations between a landlord and a tenant, and hence, the agreement
was not legally binding. Similarly, in Wilson v Burnett, the court held that there was no intention to create
legal relations between two friends, and the agreement was not enforceable.
The doctrine of intention to create legal relations is also crucial in prenuptial agreements, such as
Radmacher v Granatino (2010). In this case, the court held that the prenuptial agreement was
enforceable because the parties intended to create legal relations.
Two significant cases in this area were Blue v Ashley and MacInnes v Gross, which were decided in
2017. In Blue v Ashley, the court held that a conversation between a billionaire businessman and a
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