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Obligations Intention. Overview n the role of presumptions n domestic or social agreements n commercial agreements n agreements with government n preliminary.

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Presentation on theme: "Obligations Intention. Overview n the role of presumptions n domestic or social agreements n commercial agreements n agreements with government n preliminary."— Presentation transcript:

1 Obligations Intention

2 Overview n the role of presumptions n domestic or social agreements n commercial agreements n agreements with government n preliminary agreements

3 Traditional approach n presumption that commercial agreements are intended to be binding (Banque Brussels v ANI) n presumption that domestic and social agreements are not intended to be binding (Balfour v Balfour)

4 Balfour v Balfour n The common law does not regulate the form of agreements between spouses. Their promises are not sealed with seals and sealing wax. The consideration that really obtains for them is that natural love and affection which counts for so little in these cold Courts. … In respect of these promises each house is a domain into which the King's writ does not seek to run, and to which his officers do not seek to be admitted.

5 Ermogenous v Greek Orthodox Community of SA Inc n [25] intention describes what would objectively be conveyed by what was said or done - it is not a search for the uncommunicated subjective motives or intentions of the parties

6 Ermogenous v Greek Orthodox Community of SA Inc n [26] we doubt the utility of using the language of presumptions in this context - at best it identifies the party who bears the onus of proof

7 n domestic or social agreements n commercial agreements n agreements with government n preliminary agreements

8 n domestic or social agreements n commercial agreements n agreements with government n preliminary agreements

9 ANI Spedley Holdings Spedley Securities BBL Letter of comfort $5m loan

10 Banque Brussels v ANI n 1. We confirm that we are aware of the eurocurrency facility of US$5 million which your Bank has granted to Spedley Securities Limited, which is a wholly-owned subsidiary of Spedley Holdings Limited.

11 Banque Brussels v ANI n 2 (a) We... state that it would not be our intention to reduce our shareholding in Spedley Holdings Limited from the current level of 45% during the currency of this facility. n 2 (b) We would, however, provide your Bank with ninety (90) days notice of any subsequent decisions taken by us to dispose of this shareholding, and furthermore we acknowledge that, should any such notice be served on your Bank, you reserve the right to call for the repayment of all outstanding loans within thirty (30) days.

12 Banque Brussels v ANI n 3. We take this opportunity to confirm that it is our practice to ensure that our affiliate Spedley Securities Ltd, will at all times be in a position to meet its financial obligations as they fall due. These financial obligations include repayment of all loans made by your Bank under the arrangements mentioned in this letter.

13 Banque Brussels v ANI n There should be no room in the proper flow of commerce for some purgatory where statements made by businessmen, after hard bargaining and made to induce another business person to enter into a business transaction would, without any express statement to that effect, reside in a twilight zone of merely honourable engagement. (Rogers CJ)

14 n domestic or social agreements n commercial agreements n agreements with government n preliminary agreements

15 n domestic or social agreements n commercial agreements n agreements with government n preliminary agreements

16 Masters v Cameron 1. Parties agree on all terms and intend to be immediately bound but intend to restate the terms more fully 2. Parties agree on all terms but make performance conditional on execution of a formal document 3. Parties do not intend to make a bargain at all unless they make a formal contract

17 ‘4 th category’ n parties intend to be bound immediately but expect to make a further contract in substitution for the first, including additional terms (Baulkham Hills Private Hospital v GR Securities, PRH [5.105])


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