Contract Law Exam with a problem question on misrepresentations and an essay on the presumption of an intention to create legal relations. The grades and feedback for each question is shown at the end.
This essay strives to disprove the assertion that it is extremely difficult to rebut the presumption that there is no
intention to create legal relationships when analysing the court’s approach to marital, domestic, and social
relationships.
To reach this judgement, this essay will first define the doctrine of intention to create legal relations,
distinguishing between family and commercial relationships. Then this essay will analyse martial agreements,
other domestic relations, and agreements between family members, exploring their principles, authorities, and
rebuttals.
Intention to create legal relations
In contract law, it is recognised that even if agreements fulfil the formational requirements of a contract, not all
are intended to be legally enforceable. Courts make a distinction between commercial relations and those
between domestic or social relationships; whilst there is a presumption in favour of the former, there is a
presumption against the latter. This distinction, as Atkin supposes, functions to limit the prevalence of trivial
domestic cases which take up court time and subsequently conserve judicial resources (Balfour v Balfour).
Furthermore, it is recognised that the law should restrain from regulating domestic and social agreements.
However, being a century on from the establishment of the doctrine by Atkin in Balfour, this restraint could be
out of step with modern life.
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, To establish whether there has been an intention to create legal relations, Courts take an objective
perspective to consider whether a reasonable person would have interpreted the agreement as having an
intent.
Marital relations
Regarding relations between husbands and wives, there is a presumption that where a husband and wife live
together in amity, there is no intention to create legal relations. This principle was established in Balfour v
Balfour where an oral agreement recognised that Mr Balfour would pay his wife £30 per month until she could
return to Ceylon. Though they separated two years after this agreement, Mrs Balfour still pursued the monthly
stipend. Despite this being the leading authority for the presumption at issue, the court’s approach was not
unanimous. In fact, Sargant J held that Mr Balfour was obligated to uphold this agreement, demonstrating how
the doctrine of intention to create legal relations is shrouded in uncertainty. Whilst there is a negative
presumption against domestic relationships, this cannot be relied upon. The facts of each case must still be
analysed to determine whether it is possible to imply that a contract has been formed.
This uncertainty is accentuated by the rebuttal to this martial presumption: where couples no longer live in
‘amity’, there is a presumption in favour of an intention to create legal relations. Whilst the court in Merritt v
Merritt came to a completely different deduction, the facts were very similar to Balfour. Mr Merritt agreed to
pay his wife £40 per month if Mrs Merritt kept up the mortgage payment with the agreement that the property
would be transferred to her once the mortgage was paid. The court held that this agreement was legally
binding with Lord Denning claiming that the concept of ‘amity’ is what distinguished the two. Yet, the Balfour
couple could be argued to have not lived in amity as they were living apart at the conception of the agreement
and separated two years after. This resulted in Lord Upjohn stating in Pettitt v Pettitt that the doctrine of
intention to create legal relations was stretched to “its limits” in Balfour. Subsequently, it is likely that
presumptions regarding marital couples are very likely to be rebutted or is rendered unhelpful as it is very hard
for the court to objectively determine whether a married couple is living in “amity”, especially when the doctrine
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