1. ITCLR

framework for ITCLR

1. objective approach

2. social and domestic arrangements

3. commercial arrangements

1. Objective approach (3+case)

in order for an agreement to be legally binding there must be an intention to create legal relations between the parties

which is judges objectively [RTS Flexible systems v molkerei allois 2010]

would a reasonable person expect ITCLr in the circumstances

RTS Flexible systems v molkerei allois 2010 quote

the contract is not dependent on the subjective state of mind of the parties and their agreement and whether that leads objectively to a conclusion they intended to create.

two presumptions

there is a rebuttable presumption that there is no ITCLR in a domestic or social settings

there is a rebuttable presumption that there is an ITCLR in commercial settings

2. social settings (4)

no ITCLR for husband and wife [balfour v balfour 1919

no ITCLR between mother and daughter [jones v padavatton 1969]

no ITCLR for social competition [Lens v Devonshire Club 1914]

no ITCLR for agreement in social setting [Blue v Ashley 2017]

balfour v balfour 1919

husband pat wife £30 a month whilst husband left for sri lanka - no ITCLR as agreement based on love and affection which is outside the ‘realm of contracts’

jones v padavatton 1969

mother pay daughter allowed for studying the bar exam - no ITCLR payment was not certain and period which contract had passed due to daughters failed attempts

lens v devonshire club 1914

The winner of a golf tournament was not entitled to sue for the prize. It was a social competition and there was no ITCLR.

Blue v Ashley 2017

agreement made in pub that D would pat £15m if shares reached £8 - no ITCLR cos in pub

Rebutting the social presumption (5)

The presumption may be rebutted where the facts indicate there was an ITCLR and this intention is interpreted at the time the agreement was made

• where the parties have separated prior to making the agreement [merrit v merrit 1970]

• where there is an element of commercial dealings [snelling v john snelling 1973]

• where the parties have acted to their detriment [parker v clark 1960]

• rebutting factors apply to social agreements [simpkins v pays 1955]

merrit v merrit 1970

separated husband and wife agreement £40 a month to wife for mortgage - because they were separated did not negate prior ITCLR / more of a commercial transaction

snelling v john snelling 1973

if one brother retired money spent oncompany mortgage - There was an ITCLR as despite it involving brothers, the company still benefited of the contract if one of the brother resigned.

parker v clark 1960

older couple agreed that a younger couple could sell their home to live with the former. Devlin J held that despite the domestic setting the language and precise details governing the arrangement indicated an ITCLR.

simpkins v pays 1955

parties agreed each week to share winnings of a coupon, they won and one party did not want to share. Held that despite the social setting, there was a weekly agreement discussed multiple times and thus ITCLR.

3. commercial agreements (2)

ITCLR in business contexts [edwards v skyways 1969]

ITCLR where there is evidence of promise [carlill v carbolic smoke ball 1892]

edwards v skyways 1969

An airline company was making pilots redundant and giving them a payment. The claimant left the company before the payments and the defendant refused to pay C. Held there was an ITCLR as the agreement was made in a business context.

carlill v carbolic smoke ball 1892

the defendants advertised a Carbolic Smoke Ball and a £100 reward for trying it. The claimant successfully sued the company as she did not receive the money after trying it. The advertisement was not merely a gimmick and had evidence of a promise and ITCLR.

rebutting commercial agreements (3 +2 cases)

the preseumption of ITCLR can be rebutted where the facts indicate that there was no ITCLR

• where it is expressly stated [rose and frank v cromption and bros 1925]

• where there is flexibility and uncertainty [baird textile holdings v marks & spencer 2001]

rose and frank v crompton and bros 1925

the claimants were the defendants’ agents to sell a certain kind of paper, and the document setting this out had an ‘honourable pledge clause’, meaning it had an ITCLR to supply paper but not a legally binding one - no ITCLR

baird textile holdings v marks & spencer 2001

Baird supplied fabrics periodically for M&S for years but with no written agreement. (which was standard practice for M&S). M&S suddenly terminated the contract. Held there was no ITCLR or valid contract as the agreement was so flexible over so many years it was too uncertain to determine.