Justifying Intention Requirement in Contract Formation
TITLE
Assess whether the requirement of an intention to create legal relations in the formation of valid contracts is justified.
ESSAY
Title: The Requirement of Intention to Create Legal Relations in the Formation of Valid Contracts
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🚀 Introduction
In the English legal system, the requirement of an intention to create legal relations is a fundamental aspect of contract law. This essay aims to assess whether this requirement is justified in the formation of valid contracts, considering its place in contract law, the justifications behind it, and its implications.
🚀 Assessment of Knowledge and Understanding (AO1)
The doctrine of intention to create legal relations plays a crucial role in the context of contract formation. It serves as a rule of law established on grounds of public policy to determine the enforceability of agreements. Due to the inherent difficulty in determining parties' subjective intentions, courts adopt an objective approach by using rebuttable presumptions.
In social or domestic agreements, the presumption of no intention to create legal relations was established in Balfour v Balfour, unless rebutted as seen in Merritt v Merritt. In contrast, in commercial agreements, there is a presumption of intention to create legal relations, exemplified in Esso Petroleum Co. Ltd v Commissioners of Customs and Excise, unless rebutted through various means such as contractual provisions as seen in Rose and Frank Co v Crompton Brothers Ltd.
🚀 Analysis and Application (AO2) and Evaluation (AO3)
The relevance of the intention to create legal relations requirement is often deemed limited as it is rarely litigated, indicating that parties generally intend to be legally bound when elements like offer, acceptance, and consideration are present. Some academics argue that this separate element serves no real purpose in social agreements, stating that the presence of offer, acceptance, and consideration should suffice for enforcement.
However, justifying this requirement lies in the recognition of the seriousness of business agreements compared to the more casual nature of domestic arrangements, aiming to prevent excessive litigation. By respecting freedom of contract, this doctrine achieves certainty in contract enforcement when the presumptions are followed while allowing flexibility by permitting them to be rebutted. The policy arguments supporting this law assert that it prevents the 'floodgates of litigation' and upholds the sanctity of commercial agreements.
Overall, the requirement of an intention to create legal relations in contract formation can be justified as it balances the interests of parties in different types of agreements, upholds the principles of certainty and freedom of contract, and aims to prevent unnecessary disputes.
🚀 Conclusion
In conclusion, the requirement of an intention to create legal relations plays a crucial role in the formation of valid contracts in the English legal system. While there are arguments questioning its necessity, the doctrine serves as a significant pillar in contract law, ensuring clarity, certainty, and fairness in contractual relationships.
SUBJECT
LAW
PAPER
A level and AS level
NOTES
Assess whether the requirement of an intention to create legal relations in the formation of valid contracts is justified.
AO1 out of 12 marks:
💥 Explain the place of the doctrine in the context of formation of a contract and the basis of it as a rule of law or on grounds of public policy.
💥 Explain that because it is difficult to know if the parties had the necessary desire to form a contract, the courts judge intent objectively by using rebuttable presumptions to assist.
💥 Explain the presumption in social or domestic agreement of no intention to create legal relations (Balfour) unless rebutted (Merritt).
💥 Explain the presumption in commercial agreement of an intention to create legal relations (Esso Petroleum Co. Ltd v Commissioners of Customs and Excise) unless rebutted by several means, e.g., contractual provision (Rose and Frank Co v Crompton Brothers Ltd).
AO2 out of 5 marks:
💥 Justify a limited relevance by the fact that it is rarely litigated.
💥 Assess the merits of academic argument that the separate element of intention to create legal relations serves no purpose, particularly in social agreements, arguing that with offer, acceptance, and consideration present, a contract will be enforced as an indication that parties intend to be legally bound.
💥 Assess the merits of policy arguments for framing the law as it is – recognition of the seriousness of business agreements and the generally frivolous nature of domestic agreements to prevent the ‘floodgates of litigation’.
AO3 out of 8 marks:
💥 Assess whether it is justified because it respects freedom of contract, achieves certainty when the presumptions are followed and provides flexibility by allowing presumptions to be rebutted.