Intention to create a legal relationship 1.

The court has a presumption that can be rebutted that people within social or domestic relationships do not intend to create legally binding contracts, whereas those in commercial situations do have the required state of mind for legal relationships. 2. When courts determined whether or not there is in fact a legal relationship they will determine this using the objective test and not what the parties believed was the case They do not inquire into their state of mind: Edmunds v Lawson 3. The context/situation surrounding every case is important, but the courts will always begin with the standard presumptions and see if they are needing to be rebutted. 4. Balfour v Balfour: Where a husband and wife are living together as one household the rule is they do not intend to form a legal relationship at the time. 5. Merritt and Merritt: Lord Denning pointed out that the presumption noted above will not apply when couples have separated as they no longer function on honourable understandings but bargain keenly without much concern for emotion. 6. Jones v Padavatton: The rule that a husband and wife do not have it in mind that they are entering a legal relationship will also apply in cases involving mother and daughter, etc. It was pointed in Jones that this is the case. 7. This presumption also exists in social situations where there is no biological or marital relationship. But it can be rebutted: Simpkins v Pays non-related lodger was a party to the agreement. Joint-enterprise. Commercial agreements 8. Esso Petroleum v C&E Leading case on commercial agreements a presumption that businesses do intend to formulate legal agreements to have legal effect. Firstly Esso is one of the biggest petrol chains. Secondly the World Cup coins were for their own commercial benefit to attract customers. 9. This presumption may however be rebutted or refuted by: 10. Weeks v Tybald Defendant announced he would give 100 to a man who would marry his daughter with his consent. Court held this was a mere puff and in the context not to be taken with seriousness. 11. Honour pledge clauses: Rose and Frank v Crompton (remember Lecrae Black Rose) The normal presumption that commercial agreements are legally binding was rebutted here when the parties signed an honour clause stating their agreement will have no formal or legal affect. 12. Edwards v Skyways The burden of proof lies on the claimant to show the commercial agreement was not contractually binding this is hard to prove especially in cases like this that involved a employer-employee relationship.