1. INTENTION TO ENTER INTO A LEGAL RELATIONSHIP
CHAPTER 9
INTENTION TO ENTER INTO A LEGAL RELATIONSHIP
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2. Legal presumptions about intention
1 In family/social/domestic agreements the law presumes parties DID NOT INTEND to make a contract 2 In commercial /business agreements the law presumes the parties DID INTEND to make a contract 3 Both of these presumptions are REBUTTABLE – ie they can be overturned by either party producing sufficient evidence of a contrary intention See Rose & Frank v Crompton Bros and Wakeling v Ripley
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3. HOW TO DECIDE INTENTION
An agreement (by itself) is not a contract unless the parties intend it to be
Parties may clearly indicate in writing or verbally their intention to make or not make a contract (express intention)
Where intention is unclear from the agreement, courts examine the physical evidence or surrounding circumstances
The court applies an “objective test” – ie is there sufficient evidence that would lead a reasonable person to identify the parties’ real intentions at the time?
See Wakeling v Ripley and Rose & Frank v Crompton Bros
2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition

4. CONSEQUENCES OF LACK OF LEGAL INTENTION
There is an essential contractual element missing
There may be an agreement but there is no contract
There are no “legal rights or obligations” created by the agreement
Ownership of property cannot pass
Parties may only have moral or social obligations to be enforced between them
2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint slides to accompany A Guide to Business Law, 19th Edition