Intention to create legal relation

This is a question on intention to create legal relation. If two or more parties make an agreement without any intention to create legal relation or to be legally bound, that agreement will not be regarded by the courts as a contract. With regards to intention to creating legal relation it can be divided into two; there are domestic and social agreement and commercial agreement. In a situation whereby an agreement falls into the domestic and social category, there is a presumption that the parties involved do not intend to create a legal relationship. Examples of social and domestic agreement are between husband and wife as well as parent and child.

Thus, there case of Aisha and Hassan falls into the parent and child relationship under the social and domestic agreement category. Such agreement cannot be enforced by law as it is state earlier that when Hassan made the promise, he doesn't not intend to be legally bound. It was merely a family arrangement. This was held in the case of Jones v padavatton(1969) where a mother promise to her daughter was ruled not enforceable.

Moreover, an agreement is not binding unless there is consideration. A consideration is described as being something which represents either some benefit to the person making a promise or some detriment to the person to whom the promise is made. For an agreement to be binding there has to be an offer, acceptance and consideration. In the case of Aisha and Hassan, there has been no consideration on Aishah's part because she is giving nothing in return to her father. Although it might be argued that her attending all of her attending all of her classes is enough consideration but this is already a condition of her contract with the university. Such agreement i.e. between Aisha and the Elephant and Castle University can be said to be a commercial agreement. Authority for this is Edmunds v Lawson(2000). Where commercial agreement was extended to include educational agreement and such, her attending classes is a performance of an existing contractual duty. Courts would only consider intention to create legal relation only if offer, acceptance and intention to create legal relation has been established. In mere social or domestic arrangement cannot be enforced.

By and large, Aishah cannot in law enforce Hassan to fullfil his promise as there isn't any consideration on her part and as a result of the authorities in the aforementioned cases, there is no legally binding agreement between them. See also Balfour v Balfour (1919).

(b) This is a question is based on revocation of an offer. Eric made an offer to Fred which he accepted and went on with performing the contract. For there to be a contract, offer acceptance and consideration needs to be established. When an offer is made, an unconditional agreement to all the term of the offer makes a contract. However, Eric met Fred halfway through carrying out the contract and withdrew his promise. Acceptance is often oral or writing however, performance of the offer thus equals acceptance. In English law an offer into unilateral contract cannot be revoked once offeree has commenced performance. Eric has already commenced the London marathon and has actually spent some money towards the preparation. The courts of appeal in Daulia Ltd v Foux Millbank Nominees Ltd state “obiter” that once an offence had stated to perform on a unilateral contract. Although this contract is bilateral as it is between two parties, it is too late for Eric to revoke the offer. Thus Eric is bound in law to make the payment of £100 to Fred. Lord denning in Errington v Errington &woods (1952) that such promise was a unilateral contract, a promise of £100 in return for Fred's completion of the London marathon. It could not be revoked by Eric once Fred has commenced the performance of the Act, Eric would have cease to be bound had Fred left the race incomplete or unperformed. As a result of this procedure, Eric is bound to pay the £100 to Fred.

© This question comprises of offer, acceptance and as well, it focuses on the communication of acceptance. At 10.00pm, Greg telephoned Harveen offering to buy his car for £2000. This act constitutes his first stage of a contract being an offer. Harveen said she would only sell for £2,500. This is called a counter offer. A counter offer terminates the original offer. Hyde v wrench (1840). Harvey's offer of £2,500 terminates the initial offer of £2000 by Greg. Therefore the contract, if formed begins at the point of the counter offer. The initial offer of£2000 no longer exists. Harveen, however promised not to sell the car to anyone else before 5.00pm. Meanwhile, at 4.00pm, Harveen received a call from Jake offering to buy the car for £2,500 to which harveen accepted. Thus a contract was performed between Harveen and Jake at 4.00pm. By 6.00pm, Harveen played back the message on her answering machine only to find out that Grey had accepted to pay the £2,500 for the car.

The rule of acceptance is that it usually does not take effect until it is communicated to the offeror. Lord Denning in on of his colorful judgments stated in Entores Ltd v Miles Far East Corporation (1955) that if A shouts an offer to B across a river but just as B yells back an acceptance, a noisy aircraft flies over preventing A from hearing B's reply, no contract has been made. For a contract to be formed, Harveen must have knowledge of Greg's acceptance. The reason for this rule is to avoid a party to a contract being bound without knowing that their offer had been accepted. In this case, Harveen, having promised Greg not to sell the car until 5.pm does not hear back from him until 6.00pm when she played back the message on her answering machine and at the point, the car had already been sold. Harveen had no knowledge of Greg's acceptance and therefore cannot be bound.

Would silence have amount to acceptance on Greg's part? The court in Felthouse v Binding (1862) held that silence would not be amount to acceptance unless it is absolutely clear that acceptance was intended.