ITCLR

Objective test

A standard used to determine what a reasonable person in the position of the parties would have been likely to have intended.

Domestic relationship

A context where the courts presume that agreements are not intended to be legally binding.

Commercial arrangement

A context where trade, business, or employment leads the courts to presume that the parties intended agreements to be legally binding.

Balfour v Balfour

A case where the husband’s agreement to pay his wife while working abroad was held not to be legally binding due to the nature of domestic agreements.

Consideration

Something of value exchanged between parties in a contract; in Jones v Padavatton, the arrangement lacked consideration.

Coward v Motor Insurance Bureau

A case where a simple agreement between work colleagues to share travel costs was not deemed legally binding.

Rebuttal presumption

The principle that allows for the assumption of non-legally binding agreements to be challenged or overridden.

Merritt v Merritt

A case that established that the presumption of non-legally binding agreements between estranged spouses could be rebutted.

Parker v Clarke

A case where an agreement to live in a house and inherit it was held legally binding due to clear intentions of the parties.

Simpkin v Pays

A case where lodgers in a house who agreed to split competition winnings were found to have a mutual obligation to share the prize.

Edwards v Skyways

A case in which an airline’s commitment to pay an ex gratia payment was determined to have legal force.

Esso Petroleum Co. v Commissioners of Customs and Excise

A case that concluded promotional material from a business implied an intention to create legal relations.

RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH

A landmark case where the Supreme Court ruled that the parties involved were no longer legally bound by a contract due to their conduct, emphasizing that the intentions and actions of the parties can affect contractual obligations and the formation of agreements.

Honourable pledge clause

A clause in an agreement indicating that the main agreement is not intended to create any legal obligations, emphasizing its voluntary nature and the parties' understanding that they are not bound by enforceable commitments.

Kleinwort Benson Ltd v Malaysia Mining Corporation

A case where a statement of intention in the form of a comfort letter regarding repayment was not considered a contractual promise.

Hadley v Kemp

In this case, a dispute arose among band members regarding the division of royalties. The court ruled that the plaintiffs were not joint owners of the copyrights (with a minor exception) and asserted that any claims for money against the second defendant were legally unfounded. This case underscores the necessity of formal agreements to clarify contractual obligations and ensure fairness in informal arrangements.

Blue v Ashley

A case concerning a casual conversation where a financial offer was made by Ashley to Blue, wherein the court held that the agreement was not legally binding due to the informal context of their interaction. The case highlights the importance of the tone and setting in which agreements are made, indicating that casual discussions, without formal intent or clear commitments, may lack the necessary elements to be enforceable as a contract.