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Intention to create legal relations

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › Intention to create legal relations

  • This topic has 1 reply, 2 voices, and was last updated 3 years ago by MikeLittle.
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  • January 21, 2022 at 4:36 pm #647220
    fizaali
    Participant
    • Topics: 53
    • Replies: 36
    • ☆☆

    1) Domestic or social agreements:
    It is presumed that there is no intention to be legally bound so the contract between any domestic and social agreements are void (as stated in the Balfour v Balfour case)

    2) Spouses living together:
    Agreements between them are not presumed to be binding legally.

    3) Spouses separating:
    Agreements between them are presumed to be binding legally (as stated in the Merritt v Merritt case)

    4) Agreement between friends:
    Agreements between them are not presumed to be binding legally.

    5) Commercial agreements
    Agreements between them are presumed to be binding legally.

    However, even all these agreements can be legally binding even if it is a domestic/social (or any other) context the presumption can be rebutted if the two parties mutually intended to share the prize money so they had the intention to create legal relations (as stated in Simpkins v Pays). correct?

    I watched your lecture on it and this is what I understood. All of it is correct sir?

    Could you please also give an example regarding commercial agreements?

    January 22, 2022 at 9:32 am #647247
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    I can see nothing instantly wrong with your summary

    An example of a commercial agreement? What about two small private companies enter into an agreement where Company A transfers a piece of equipment to Company B in exchange for the promise from Company B to transfer an asset to Company A next month

    But, when next month arrives, Company B now refuses to make the transfer of the promised asset

    Is this not an example of two commercial enterprises entering into a position where it appears (to me at least) that there was intention to create legal relations. But surely this is the basis for the whole of commercial law!

    OK?

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