In-depth and complete notes on Intention to Create Legal Relations, prepared for the 2019 Contract Law exam at Cambridge University. The author achieved first class for this paper (71%), including three 78% scores in the final exam, ranking third in the cohort.
An essential ingredient of a binding contract is that parties must have had an intention to create legal relations—i.e.
intention to be bound by the terms of their agreement. Balfour v Balfour established this doctrine.
• Do not confuse with the closely related legal argument that there was no intention to contract
o Can argue that there was no intention to create legal relations even though agreement had been reached
o Otherwise or in addition, can argue that the agreement was too vague or uncertain to amount to a contract,
and therefore there was actually no intention to contract
• Burden of proof: C must prove that a contract has been concluded. If the essential ingredients are shown, then
D may wish to prove that the parties did not intend to create legal relations, at least in the case where agreement
was made in a commercial context.
Key cases & materials
Case Notes
DOMESTIC AGREEMENTS
Balfour v Balfour [1919] (CA) Firmly established intention to create legal relations as an essential
ingredient of a binding contract.
Family promises are prima facie unenforceable unless there is an objective
indication that the agreement was intended to have legal effect.
• Even if supported by consideration, agreements between spouses are
presumed to be legally unenforceable unless the marriage has already
foundered or there is some other objective indication that the agreement was
intended to have legal effect.
• FACTS: D & C were husband & wife. D went to live in Ceylon while C
stayed in England; C alleged that before departing, they made an oral
agreement that D would pay C £30/month until she went to Ceylon. But
they later decided that they should live apart; C commenced divorce
proceedings & also sought to enforce the alleged agreement for £30/month.
• HELD: Not liable to make the promised payments to C.
• Per Atkin LJ: Clearly recognised the existence of doctrine of intention to
create legal relations, by expressing it as an independent requirement of a
binding contract
• Whereas per Warrington LJ: Seemed to include intention to create legal
relations as a relevant consideration but not expressly as an independent
requirement
• Whereas per Duke LJ: Found that C had not supplied good consideration
for D’s promise, because they were still husband & wife
• However, since that case, Atkin LJ’s reasoning has been adopted as
authority for this doctrine.
• Pettitt v Pettitt, per Lord Upjohn: Because C and D agreed to separate
shortly after D promised to pay £30/month, Balfour stretched the doctrine
to its limits → close to margin
Merritt v Merritt [1970] (CA) Where husband & wife have separated, the presumption that there was no
intention to create legal relations is displaced. Perhaps instead presume
that there was such intention (see below).
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