Question 4 October/November 2008 Introduction

Sarah, Emma and Natalie will probably initiate an action against uncle Louis for breach. For a valid Contract as per Lord Wilberforce in the case of Eurymedon (1975) 1) ITCLR 2) Agreement 3) Consideration 4) No Vitiating Factors As such, all three girls must prove the 4 essential requirements of a valid contract. However the most contentious issue here is Intention to create legal relation (ITCLR)

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Explain what is ITCLR Briefly
Intention to create legal relation (ITCLR) is an essential doctrine in the law of contract

primarily created for a policy reason to strike out flood gate of litigation. It could be said that the doctrine is objectively interpreted in a third person view to ascertain the intent. The doctrine works in a way that in Domestic or Social agreement, there is a presumption that there will be no ITCLR. However in Commercial agreement this intent is could be easily derived because of the nature of transaction and the law governing it. However both presumptions are not an irrebuttable presumption.

Scottish Law Commission (1977) It is, general right that courts should not enforce entirely social engagements, such as arrangements to play squash or to come to dinner, even though the parties themselves may intend to be legally bound thereby On The Fact : Prima facie, Sarah, Emma and Natalies agreement with their uncle will be most likely construe as a domestic agreement. Reason: The relationship between Louis and the three girls is not a legal relationship There is no bargain between the three girls and Louis No Prior agreement of payment between them The agreement took place in a very informal place and informal manner

Case 1 : Balfour v Balfour The defendant, a civil servant, was posted abroad and left his wife, the claimant, in England. The claimants health was not sufficiently good to accompany her husband. Before leaving, the defendant promised to pay the claimant 30 per month allowance whilst they were apart. This promise was breached by the defendant. It was held that the party doesnt intend to create legal relations. LJ Atkin stated that: Agreements such as these are outside of the realm of contracts altogether. The common law does not regulate the form of agreements between spouses.The consideration that really obtains for them is natural love and affection which counts for so little in these cold courts OTF:
Could be construed as a domestic agreement?

An analogy could be drawn between Balfour v Balfour and the present fact.
Could it be said that this agreement was done purely out of love and affection? If Balfour v Balfour still applies, Can the presumption be rebutted by other evidence?

Case 2: Merrit v Merrit A husband and wife separated. They later met and agreed that if H paid off the outstanding mortgage payments on the matrimonial home, the house would be conveyed to W. This was recorded in writing. W paid off the mortgage but H refused to transfer the house to her. Held: The court held that this is more than a mere domestic agreement and combining together the fact that the Husband and Wife already separated , the intention to create legal relation could be inferred. OTF: Uncle Lois and the three girls in a good realtionship and as such Merrit v Merrit is distinguishable.

Case 3: Jones v Padavatton A mother purchased a house for her daughter to live in whilst she was a law student. Three years later, M and D quarreled and M sought possession of the house. D had not yet passed her bar examinations. Held: The court of appeal held that the agreement was not intended to be legally binding. OTF: By analyzing Balfour v Balfour , Merrit v Merrit and Jones v Padavatton and by drawing analogy to the present fact, more probable than not , there is no ITCLR between the three girls and the defendant Louis.

However it is an entrenched principle of English Law that any detrimental reliance towards any promise made could be enforceable in court. (Parker v Clark) Is there any detrimental reliance on the facts? Perhaps it could be said that the three girls would have stopped playing the instrument for one day at Covent Garden shopping centre to play at the wedding party. Could it be construed as a detrimental reliance? Alternatively Case 4: Buckpitt v Oates (1968) With ordinary social arrangements, the courts will require special evidence of intention to rebut the presumption that the parties did not intend to create legal relations. Here, two workmates used to share journeys to work. One used regularly to contribute something to the cost of petrol but there was no formal agreement about it and the court considered that there was no intention to create an enforceable agreement. On the fact: Is there any Special evidence to prove the existence of ITCLR? Act of the girls asking for payment of 300 pounds by invoice? Alternatively it could be construed as a commercial agreement, Case 5: ESSO PETROLEUM v COMMISSIONERS OF CUSTOMS AND EXCISE (1976) As a sales promotion scheme, Esso produced millions of free World Cup coins each bearing a likeness of members of the England squad for the 1970 World Cup. They advertised widely that they would give away a coin with the purchase of four gallons of petrol. Esso denied an intention to create legal relations as the coins were of little intrinsic value. Held: House of Lords divided in this issue. The majority Lord Simon, Lord Wilberforce and Lord Fraser, held that there was as intention to create legal relations. They placed heavy reliance on the onus of proof in commercial transaction. The minority stated that the coins were going free and the minimal value of the coins, held that there was no ITCLR OTF,
Could it be construed as a commercial transaction? Does the agreement between them have any legal standing? What are the levels of competency of the three girls? A Are they professional musicians? Was it playing music are their job/occupation? Is there any express agreement?

Conclusions: Is there an ITCLR? If yes , provided that other contractual requirements satisfied , there will be a valid contract which could be enforceable by Sarah , Emma and Natalie to claim 300 pounds from Uncle Loius. If there is no ITCLR, there agreement between them is not enforceable