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Chapter

Cover Cheshire, Fifoot, and Furmston's Law of Contract

5. Intention to Create Legal Relations  

M P Furmston

This chapter, which examines the requirements of intention to create legal relations, discusses its application to domestic agreements such as agreements between husband and wife and commercial agreements.

Book

Cover Essential Cases: Contract Law
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. Essential Cases provides you with succinct summaries of some of the landmark and most influential cases in contract law. Each summary begins with a review of the main case facts and decision. The summary is then concluded with expert commentary on the case from the author, Nicola Jackson, including an assessment of the wider questions raised by the decision. It can act as a succinct reference source alongside your core textbooks as you proceed through your course. It can also be used as a stand-alone revision aid as you approach examinations. But central to the Essential Cases series is the aim to encourage your own critical exploration of the legal matters under discussion. Where possible, a link to a free-to-access full version of the judgment is included in each summary, providing you with an opportunity to deepen your understanding by reading the judgment of the court for yourself.

Book

Cover Essential Cases: Contract Law 5e
Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. Essential Cases provides you with succinct summaries of some of the landmark and most influential cases in contract law. Each summary begins with a review of the main case facts and decision. The summary is then concluded with expert commentary on the case from the author, Nicola Jackson, including an assessment of the wider questions raised by the decision. It can act as a succinct reference source alongside your core textbooks as you proceed through your course. It can also be used as a stand-alone revision aid as you approach examinations. But central to the Essential Cases series is the aim to encourage your own critical exploration of the legal matters under discussion. Where possible, a link to a free-to-access full version of the judgment is included in each summary, providing you with an opportunity to deepen your understanding by reading the judgment of the court for yourself.

Chapter

Cover Contract Law

12. Boilerplate Clauses  

This chapter examines some standard clauses found in commercial contracts today (often known as ‘boilerplate clauses’). The focus is on commercial contracts and terms that will, in all probability, have been drafted by lawyers. After first setting out some general considerations that relate to the structure of modern contracts, the discussion moves on to examine some standard form clauses to be found in such contracts. These include general clauses, retention of title clauses, price escalation clauses, clauses making provision for the payment of interest, force majeure clauses, choice of law clauses, arbitration clauses, jurisdiction clauses, hardship clauses, entire agreement clauses, no oral modification clauses, termination clauses, assignment, and, albeit briefly, exclusion and limitation clauses.

Chapter

Cover Sealy and Hooley's Commercial Law

1. An introduction to commercial law  

D Fox, RJC Munday, B Soyer, AM Tettenborn, and PG Turner

This chapter introduces the reader to commercial law. It first considers the nature of commercial law by focusing on the definitions offered by previous scholars of note. It then examines its function and historical development, and discusses various sources of commercial law such as contracts and national legislation. In addition it refers importantly to the role of equity and trusts in commercial law, to public law in the commercial arena, and to the philosophy and concepts of commercial law. Possible codification of commercial law is discussed. Finally, the chapter assesses the challenges for commercial law in the twenty-first century and briefly discusses the impact of Brexit on English commercial law.

Chapter

Cover Contract Law

9. Unfairness: undue influence, non-commercial guarantees, unconscionable bargains  

This chapter examines three doctrines that allow a party to set aside a contract: (1) undue influence, which deals with the abuse of relationships of trust and confidence; (2) a doctrine protecting non-commercial parties who guarantee another’s debts; and (3) unconscionable bargains, which deals with the exploitation of bargaining weaknesses. It discusses: (i) the justification for these doctrines; (ii) the burden of proof for undue influence, unfair non-commercial guarantees, and unconscionable bargains; (iii) how each element of the respective burdens of proof is satisfied; and (iv) whether the law is satisfactory, and if not, how it might be developed in the future.

Chapter

Cover JC Smith's The Law of Contract

8. Intention to create legal relations  

This chapter discusses the intention to create legal relations in the formation of a contract in domestic or social and commercial transactions. In a domestic or social context, there is a presumption that the parties do not intend to create legal relations. In a commercial context, however, the reverse applies and it is presumed that the parties do intend to create legal relations. No matter which presumption initially applies, that presumption may be rebutted by evidence to the contrary. The chapter concludes that it will not always be easy to decide whether an arrangement is more ‘social’ than ‘commercial’ due to the lack of unanimity in cases such as Esso Petroleum Ltd v Commissioners of Customs and Excise. Courts continue to be split on whether or not an intention to create legal relations is present in particular disputes.

Chapter

Cover Poole's Casebook on Contract Law

4. Intention to be legally bound and capacity to contract  

Robert Merkin and Séverine Saintier

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter deals with intention to be legally bound and capacity to contract. In order to enforce any promise not contained in a deed, there must be an intention to create legal relations. This intention is traditionally determined using different presumptions for domestic and commercial agreements. In the case of domestic and social agreements, there is a presumption that there is no intention to create legal relations. In contrast, there is a presumption of an intention to create legal relations in commercial agreements. Both presumptions are capable of being rebutted on the facts, e.g. an honour clause in a commercial contract. The second part of this chapter examines capacity to contract and particularly the enforceability of contracts made by minors.

Chapter

Cover Introduction to Business Law

5. Intention, Capacity, Consideration, and Privity  

This chapter examines issues relating to contract formation. It discusses the elements of an intention to create legal relations and the presumptions relating to commercial or business agreements and domestic agreements. It considers the law relating to capacity to contract, looking at the enforceability of different types of contracts made with minors. It considers the validity of contracts made with corporations and persons who may lack capacity through mental illness or intoxication. It also explains the importance of consideration in a contract, what constitutes consideration, whether consideration provided is sufficient, and who must provide the consideration. It discusses the law relating to part-payment of debts and promissory estoppel. Finally, the chapter considers the doctrine of privity of contract, and the exceptions to the doctrine, including the Contract (Rights of Third Parties) Act 1999

Chapter

Cover Poole's Casebook on Contract Law

4. Intention to be legally bound, formalities, and capacity to contract  

Robert Merkin KC, Séverine Saintier, and Jill Poole

Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter deals with intention to be legally bound and capacity to contract. In order to enforce any promise not contained in a deed, there must be an intention to create legal relations. This intention is traditionally determined using different presumptions for domestic and commercial agreements. In the case of domestic and social agreements, there is a presumption that there is no intention to create legal relations. In contrast, there is a presumption of an intention to create legal relations in commercial agreements. Both presumptions are capable of being rebutted on the facts, e.g. an honour clause in a commercial contract. The second part of this chapter examines capacity to contract and particularly the enforceability of contracts made by minors.

Chapter

Cover Commercial Law Concentrate

13. The relationships created by agency: the rights and liabilities of the parties  

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter focuses on the relationships created by agency, namely, the rights and liabilities of the agent, the principal, and the third party. It first explains disclosed agency as opposed to undisclosed agency with regard to the contract made by the agent, and then, after discussing the rights and liabilities of the principal and the third party, considers the rights of the agent against their principal, including remuneration, indemnity, and lien. The chapter examines the agent’s two kinds of duty to their principal (contractual duty and fiduciary duty) and discusses remedies for breach of fiduciary duty and how an agency may be terminated as well as the effects of termination. It concludes by highlighting the provisions of the Commercial Agents (Council Directive) Regulations 1993.

Chapter

Cover Essential Cases: Contract Law

Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401, Court of Appeal  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover Essential Cases: Contract Law

Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] QB 833  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] QB 833. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover Essential Cases: Contract Law 5e

Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401, Court of Appeal  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover Essential Cases: Contract Law 5e

Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] QB 833  

Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Atlas Express Ltd v Kafco (Importers and Distributors) Ltd [1989] QB 833. The document also includes supporting commentary from author Nicola Jackson.

Chapter

Cover Essential Cases: Equity & Trusts

Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, House of Lords  

Essential Cases: Equity & Trusts provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in Cobbe v Yeoman’s Row [2008] UKHL 55, House of Lords. The document also includes supporting commentary from author Derek Whayman.

Chapter

Cover Contract Law

4. Contracts and informal relations  

The intention to create legal relations

This chapter focuses on the requirement that the parties to a contract must have the intention to create legal relations for it to become legally binding. It considers how we decide whether the parties to a particular agreement had the intention to enter into legal relations, showing that English law operates by means of rebuttable presumptions. It then examines cases where the presumption is that the parties did not intend to create legal relations—that they intended their transaction to be merely friendly or social, rather than legal. It also discusses commercial transactions, where the presumption is reversed, and more specifically the types of commercial transactions that are structured to place them outside the bounds of legal enforcement. The chapter includes the case of Balfour v Balfour [1919] 2 KB 571 (CA).

Chapter

Cover Contract Law Concentrate

6. Exemption clauses and unfair contract terms  

Each Concentrate revision guide is packed with essential information, key cases, revision tips, exam Q&As, and more. Concentrates show you what to expect in a law exam, what examiners are looking for, and how to achieve extra marks. This chapter discusses the use and enforceability of exemption clauses (total exclusion or limitation of liability clauses inserted into contracts) and their legislative regulation. Whereas the regulation of such clauses is limited to the common law and UCTA 1977 in the case of commercial contracts (B2B), in the case of consumer contracts (B2C) the law intervenes to control a broader category of terms, ‘unfair contract terms’ (Consumer Rights Act 2015) with the critical test being ‘unfairness’.

Chapter

Cover Contract Law

7. Intention to Create Legal Relations  

An essential ingredient of a binding contract is that the parties must have had an intention to create legal relations. In other words, they must have had an intention to be bound by the terms of their agreement. This chapter, which examines the doctrine of intention to create legal relations, begins by considering cases involving domestic and social agreements before turning to analyse the role of intention to create legal relations in the commercial environment. The chapter also covers the role of presumptions in relation to proof of the existence of an intention to create legal relations and the relationship between the doctrine of intention to create legal relations and consideration.

Chapter

Cover Complete Contract Law

4. Certainty and the Intention to Enter a Legal Relationship  

This chapter investigates the basic law on the certainty and intention requirements in the creation of an agreement. To be legally enforceable as a contract, the agreement must be sufficiently certain and show an intention to enter a legal relationship. Agreements can be uncertain because they are vague, or because they are incomplete. This can indicate there was no intention to enter a legal relationship. The courts must not rewrite the agreement; they must simply interpret it. If an agreement is incomplete, the courts may decide that the missing terms are implied, and this is more likely if there has been performance. A gap in an incomplete agreement can be filled if the parties have provided a mechanism for doing so, or if the terms can be construed so as to do so. The chapter then differentiates between an agreement to negotiate (a lock-in agreement) and agreements not to negotiate with other parties (lock-out agreements). Agreements between businesses are presumed to be made with the intention to be legally binding, but the facts, the interpretation of the terms, or the surrounding circumstances could mean there was no such intention.