Intention to Create Legal Relations

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  • Intention to create Legal Relations
    • domestic and social arrangements (between family or friends) it is assumed there is no intentionto create legal relations.
      • Balfour v Balfour
        • husband stopped sending maintenance payments to his wife. It was held agreement was a purely social and domestic agreement and not legally bound
      • Exception
        • Where the parties have separated as shown or in the case 
          • Merritt v Merritt
            • husband paid money to his ex wife and if she kept up mortgage payments  he would transfer the house to her when the mortgage was completed,  Mr Merritt refused to transfer the house over to his ex wife. The Court held for Mrs Merritt as Mr Merritt shown commitment to making the payment so the agreement was legally binding
        • If there is a 3rd party to the agreement
          • Simpkins v Pays
            • Grandmother, granddaughter and a lodger entered into a weekly competition and agreed they would share the winnings if any of them won. The grandmother received £250 in prize money and refused to share the winnings. It was held the agreement was legally enforceable despite the family connection as the lodger was also party to the contract
    • Commercial agreements are  presumed to have intention to create legal relations.
      • Exception
        • expressed in the agreement itself as “binding in honour only
          • Jones v. Vernon’s Pools
            • . The coupon contained the words that the entry "shall not give rise to any legal relationships, or be legally enforceable so was unenforceable


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