Intention to create Legal Relations AO1 (OCR)

What happens after acceptance and offer has taken place?

Intention must be proven for a legally binding agreement

Business agreements

Presumed to be legally binding, however there can be situations where there may not be legal intention, the burden of proof is on the person who wants to show it has been rebutted

Business agreement case

Edwards v Skyways - demonstrates that this is even where there is a voluntary agreement.

Evidence which may rebut

Evidence which may rebut this presumption could include vague terms or where someone is acting out of good will

Free gifts and competitions

Presumed to be legally binding as businesses will benefit from them, though this could be rebutted.

Free gifts and competitions case

Esso v commissions of Excise and Custom - free coins were part of the contract for the purpose of tax

Letters of comfort

Presumed not to be legally binding and are likened to references.

Letters of comfort case

Kleinwort Benson v MMC

Unclear relationship

Wherethere is an unclear relationship which is in between social and business then it is up to the claimant to proves there is intention

Unclear relationship case

Sadler v Reynolds - journalist was able to show a binding agreement as it was linked towards financially benefitting the other party

Social/domestic relationships

They are presumed not to be legally binding as they are between family and friends

Social/domestic relationships case

Balfour v Balfour - the agreement made during the marriage was not legally binding as it was made between a man and wife

If there are financial implications

Presumption will be rebutted

If there are financial implications case

Parker v Clarke - couple was finacially reliant and their financial security was based within the agreement made to sell their house