ITCLR

Question 1

1) Social/Domestic or Business Agreements

Answer 1

Social/Domestic agreements are presumed to be not legally binding. However, the presumption can be rebutted as seen in cases (Balfour v Balfour or Merritt v Merritt)

Business agreements - The law automatically presumes that business agreements are intended to be legally binding and a contract. If there is evidence that it wasn’t intended to be legally binded then it will not be a contract. (Jones v Vernon’s Pools)

Question 2

2) Elements for Social Agreements - APPLY ONLY IF RELEVANT

Answer 2

1. These agreements are presumed to be not legally binding, through this can be rebutted. (Merritt v Merritt)
2. When familes make agreements that appear to be business agreements, the court has to assess whether its a social or business agreement. (Jones v Padvatton)
3. If money has been paid, it is more likely to be a business agreement. Simpkins v Pays - There should be some record of the agreement otherwise it may be deemed social chatter (Wilson and Burnett)

If parties put their own financial security at risk, then they must have intended the agreement to be legally binding. (Parker v Clarke)

Question 3

3) Elements for Business agreements - APPLY THESE ONLY IF RELEVANT

Answer 3

1. Business agreements are presumed to be legally binding, however this can be rebutted
2. Some contracts may be ‘binding in honour only’ meaning they cannot be contractually enforced. (Jones v Vernon Pools)
3. Burden of proof lies with the person who is trying to prove that there is no intention to be legally binding. (Edwards v Skyways)
4. Each case will be decided on its own facts. For example, when there is a free gift in order to promote a business, this can be legally binding. (Esso Petroleum v Commissioners of Customs and Excise)
5. Prizes offered in competitions show that companies intended to create legal relations. (McGowan v Radio Buxton)
6. Lettor of comfort is not legally binding. (Kleinwort Benson v Malaysian Mining Corporation)