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Intention To Create Legal Relation Notes

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A more recent version of these Intention To Create Legal Relation notes – written by Cambridge/Bpp/College Of Law students – is available here.

The following is a more accessble plain text extract of the PDF sample above, taken from our GDL Contract Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Revision: Tort



Rose & Frank v Crompton Bros: Atkin LJ - 'to create a contract there must be a common intention of the parties to enter into legal obligations, mutually communicated expressly or impliedly.'

Commercial Agreements: Presumption that parties intend to be legally bound


Well Barn Farming Lts v Backhouse: "Slight importance" / temporary nature of the agreement didn't prevent the presumption from operating o


Onus on the parties to rebut the presumption

Bunn & Bunn v Rees & Parker: Open to the parties to rebut: Here contract to sell a companyo

Terms were typical of a share purchase agreement and were not so vague as to suggest there was no intention


Defendants failed to discharge evidential burden


Presumption can be rebutted with term "Binding in honour only"


Successful ousing in Rose & Frank v Crompton Bros - "honourable pledge clause" - Agreement not legally binding


Edwards v Skyways: language - "ex gratia" not sufficient to rebut presumption - an employee was still able to enforce a promise to pay


There will be an objective assessment of the evidence to assess whether there has been a successful rebuttal (Baird Textile Holding v Marks & Spencer


Statements made in jest or anger - no intention to create legal relations


Adverts: no intention to create legal relations generally - but note Carbolic Smoke Ball c.f. Pepsico o

Bowerman v Association of British Travel Agents: "notice" created direct contractual relationship with the public - satisfied criteria for a unilateral contract as was sufficiently clear


Esso Petroleum v CCE: "world cup coins" - did demonstrate an intention to be legally bound


Kleinwort v Malaysia: A comfort letter stating the current policy is not evidence of an intention to be legally bound


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