Law

Question:
critically analyse whether it is harder to prove a rebuttal in a commercial situation as opposed to a

social one
Answer:
Intention to create legal relations is defined as an intention to enter into a legally binding contract. It
is not always easy to determine whether there is an intention to create legal relations and as a result
the court has developed two rebuttable presumptions, it is an assumption of facts unless proven
otherwise. The presumed intent can be in commercial agreements and domestic agreements.
Commercial agreements are arrangements made within a business context, it is presumed to be

legally binding unless evidence can show a different intent. There is a strong presumption that there
is an intention to create legal relation. The presumption will even apply where on the face of it, it is
gratuitous in character. In ( edwards v skyways ltd ) an attempt yo avoid exgratia payment in a
redundancy failed. Although, exgratia payment indicates no pre existing liability to pay, the
agreement to pay it once made was legally binding.
The case of Esso Petroleum v commissioners of customs and excise is another example in which esso
gave the worldcup coins with every 4 gallons of petrol purchased. Customs and excise wanted to
claim the purchase tax from the transaction. Since esso was clearly trying to gain more business from
promotion this was held as an intention to be bound by an agreement.
The difficulty in proving a rebuttal in a commercial situation lies in the presumption of intention to
create legal relations. In Rose & Frank Co v JR Crompton & Bros Ltd, the House of Lords held that an
agreement between two commercial companies to distribute goods in a non-binding manner was
not legally enforceable due to the absence of an intention to create legal relations. However, this was
an exception to the general rule in commercial situations, where the courts are inclined to presume
that parties intend to be legally bound.
On the other hand, proving intention to create legal relations in a social situation can be more
challenging. It is an arrangement between family members or social circles which are considered to
be not legally binding. For example, In Balfour v Balfour the court held that an agreement made
between a husband and wife during their marriage to provide her with an allowance while he was
working abroad was not legally binding. The court considered the social nature of the agreement and
the absence of an intention to create legal relations, as it was made in a domestic context.
However, this principle can be rebutted if there is evidence to the contrary, as there was in Merritt v
Merritt. In the case of Merritt v Merritt (1970), a husband and wife shared a house. The husband left
for another woman, but they made an agreement. He agreed to give the wife £40 per month if she
paid the mortgage. They also agreed that once the mortgage was paid off, the house would be
transferred to the wife's name. The wife held up her end of the deal and paid off the mortgage, but
the husband didn't follow through. The court ruled that there was a legal agreement and the wife
should get the house.
In social situations, the burden of proving intention to create legal relations lies with the party
seeking to enforce the agreement. This was evident in the case of Jones v Padavatton where the
court held that an agreement between a mother and daughter regarding the purchase of a house
was not legally binding as there was no intention to create legal relations. The court considered the
family relationship and the absence of commercial intent in reaching its decision.
The issue with intention ultimately comes down to the rules of rebuttal. In social and domestic
situations, people rarely think about whether there's a contract and the burden of proof lies with the
party seeking to enforce the agreement. So, it's quite extreme to be asked for clear evidence to rebut
the presumption. However, in commercial contracts where legal relations are presumed, there's a
strong obligation to provide a rebuttal, which is not easy. The person who wants to rebut the
presumption must have a clear intention and it's their responsibility to prove it.

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Question:

critically analyse whether it is harder to prove a rebuttal in a commercial situation as opposed to a

Commercial agreements are arrangements made within a business context, it is presumed to be

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