Critically discuss the presumptions relating to the intention to create legal relations.

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Critically discuss the presumptions relating to the intention to create legal relations.

It is a generally accepted rule that there must be a means of identifying agreements, which on outward appearance may seem as contracts but they are actually regarded as being beyond the reach of legal remedies. 1 It is also accepted that for a contract to come into existence there must be elements of agreement and consideration. However, these elements also cannot express that a contract has been made which is legally binding. The underlying principle to make a contract legal enforceable is the notion of "intention to create legal relations". This term is used by the courts to reject the argument of enforceability in those cases which the court feels should not be legally binding.

The view of intention to create legal relations can be classified into two broad categories. These are social and domestic relations and commercial agreements. These differ in the sense that the court presumes those social agreements, there is no intention for legal relations. However, in commercial agreements the presumption is that there is intent to create legal relations. The presumptions relating to intention of legal relations is structured