Intention to create legal relations

Hello my reader friends. This is one more blog in the series of Law of Contract. This blog is discussing about "Intention to create legal relations". Please read this blog till the end and share it with all law students. These are the notes for preparing exams of Law degree. 



Image Credit: issuu.com

Legal Relationship

Agreements of a social or domestic or political nature do not create legal relations and as such cannot give rise to a contract. What this means is those agreements that are not enforceable by the law e.g. social or domestic agreements between relatives or neighbours are not enforceable in a court of law and thus any such agreement can’t become a valid contract.

The parties to an agreement must create legal relationship. It is presumed in commercial agreements that parties intend to create legal relations. It arises when the parties know that if any one of them fails to fulfil his part of the promise, he would be liable for the failure of the contract. This element would have an agreement which is not a contract in the strict sense unless it is the common intention of the parties that it should be legally enforceable. If there is no intention to create legal relations in a contract, the contract could be subject to a lawsuit.

Case Laws: -

Balfour v. Balfour– A husband promised to pay his wife a household allowance of 30 pounds every month. Later, the parties separated and the husband failed to pay. The wife used for allowance. Held that the wife was not entitled for the allowance as the agreement was social and did not create any legal obligations. Thus if an agreement is domestic in nature then that agreement is not enforceable by law. 

Jones v. Padvattan– In this case, it was held that domestic agreements are presumed not to be legally binding unless there is a clear intention.

Example: -

1. A father promises to pay his son Rs.500 every month as pocket money. Later, he refuses to pay. The son cannot recover as it is a domestic agreement and does not create legal relations. When there is a contract or an agreement made between the parent and the children. If the parent passes away, the children would have whatever property or possession which is left by the parent. This kind of agreement can not be treated as contract because there is no intention to form a legal relation between the parties and it is kind of domestic agreement.

2. A offers to sell his watch to B for Rs.200 and B agrees to buy it at the same price, there is a contract as it creates legal-relationship between them.

Here we are discussing about one of the essentials of a valid contract, listed as follows. All essential features of a valid contract are as follows.

1) Two parties

2) offer and acceptance.

3) Intention to create legal relations

4) Lawful consideration

5) Capacity of parties

6) Free & Genuine consent

7) Lawful objects

8) Writing & registration - legal formalities

9) Certainty

10) Possibility of performance

11) Not expressly declared void.

Thanks for reading till the end. The underlined part in this article is the most important part of this subject and you must write atleast this part in the exam. Also relevant case laws will give you more advantage and an example is must in answer. Please share this blog with all the law students.