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Iclr Capacity Notes

GDL Law Notes > GDL Contract Law Notes

This is an extract of our Iclr Capacity document, which we sell as part of our GDL Contract Law Notes collection written by the top tier of Cambridge/Bpp/College Of Law students.

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Contract Law: Intention to Create Legal Relations & Capacity Intention to Create Legal Relations (ICLR)?

Need for ICRL to make valid contract: Rose and Frank v Crompton Bros)---'To create a contract there must be a common intention of the parties to enter into legal obligations, mutually communicated expressly or impliedly' (Atkin LJ). Objective assessment of parties' intentions in making an offer, would a reasonable man think ICLR? (Smith v Hughes) o 'reasonable man'/objective test (Bowerman v ABTA): would reasonable man have thought ICLR.

Presumption 1---commercial agreements, presumption of ICLR
? Commercial agreements: o Presumption = ICLR (Well Barn Farming v Backhouse; Bunn & Bunn v Rees & Parker): 'heavy burden' to show no ICLR in commercial relations. Well Barn Farming: 'slight importance' and temporary nature of arrangements? still evidence of ICLR. o Bowerman v ABTA: apply 'reasonably man' test; re ABTA document in the window saying 'ABTA arranges reimbursement', was unilateral offer to contract; 'reasonable man' would read the document as an offer of a promise.
? Rebutting presumption of commercial setting = iCRL o Express rebuttal: if specific wording/express clause to that effect, 'honourable pledge clauses' (Rose & Frank v Crompton): headnote said: 'this agreement is not entered into . . . as a formal or legal agreement'. Must use clear words, express clause will rebut presumption.
? Language to show no ICLR must be sufficiently clear (Edwards v Skyways: expression 'ex gratia' was insufficient to show lack of ICLR, presumption hard to rebut, not rebutted).
? Objective assessment of evidence enough to rebut presumption (Baird Textile v M&S). o Statements said in anger/jest (on an objective view): Licences Insurance Corp v Lawson: feisty board meeting; Lawson, angry, says vote with me on this and if it goes wrong, I will personally reimburse you? not minuted, no ICLR, made in heat of moment---objective view, reasonable man wouldn't have thought ICLR. o Adverts: o Generally ITTs, a prior negotiating step, no ICLR. Non-binding sales talk. o If ITT arises in business context: presumption = any offer in response to that invitation = ICLR. o Carlill v Carbolic: hELD: unilateral offer was legally binding---
deposit of PS1000 showed ICLR. 1

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