Intention

Question 1

is intention a fourth requirement of a contract?

Answer 1

Intention is not a fourth requirement alongside offer, acceptance, and consideration, but it instructs how we apply the other elements.

Question 2

test for intention

Answer 2

Intention is objective: Would a reasonable person say that the parties objectively manifested an intent to create legal relations? Their subjective mindset is irrelevant.

Question 3

when do we assume intention?

Answer 3

• In family and non-profit contexts, we assume that the offer is not intended to create a legal relationship, but this can be rebutted if there is objective evidence to suggest otherwise (Balfour, Merritt, Jones, Ethiopian Church).
• In commercial contexts, we assume that the parties intended to create a legal relationship, but this can be rebutted if there is objective evidence to suggest otherwise (Rose and Frank, Vernon’s Pools).

Question 4

Balfour v. Balfour

Answer 4

• Facts: A husband stopped paying a promised £30 monthly allowance to his wife after they separated.
• Rule: Agreements between spouses living in amity are presumed not to be legally binding contracts.
• Valcke/Class Note: Intention is not a fourth requirement; it is a “gloss” over the other three elements.

Question 5

Simpkins v. Pays

Answer 5

• Facts: A boarder, an elderly woman, and her granddaughter submitted newspaper competitions together and verbally agreed to “go shares,” but the defendant kept the £750 winnings.
• Rule: The presumption against intention in domestic cases can be rebutted if there is a mutuality in the arrangement.
• Valcke/Class Note: The presumption of mutuality applies because of the familial relationship, which is interpreted flexibly.

Question 6

Merritt v. Merritt

Answer 6

• Facts: A separated husband agreed in writing to transfer the jointly owned house to his wife if she paid off the mortgage, but refused to transfer it later.
• Rule: The presumption against intention in domestic cases can be rebutted if a couple has separated or is about to separate.
• Valcke/Class Note: The standard is whether a reasonable person would view the agreement as intended to be binding.

Question 7

Jones v. Padavatton

Answer 7

• Facts: A mother promised an allowance and later a house if her daughter moved to the UK to study for the bar, but tried to evict her after five years of failing.
• Rule: In domestic or social agreements, there is a presumption that parties do not intend to create legal relations.
• Valcke/Class Note: Salmon argued giving up a high-paying career rebutted the presumption, but she failed the implied term to pass the Bar in a “reasonable time”.

Question 8

Rose and Frank Company v. JR Crompton & Brothers, Limited

Answer 8

• Facts: English manufacturers and American merchants signed an agreement containing a specific clause stating it was “not entered into as a formal or legal agreement”.
• Rule: In business agreements, there is a presumption that parties intend to create legal relations, but an explicit honour clause can rebut this.
• Valcke/Class Note: This ruling is inconsistent with British American Timber, which is further evidence that British American Timber “is not right”.