The mere prescence of consideration normally implies the existence of an intention to create legal relations (Willitson-1969) if this be the case why do the two concepts co-exist?

Authors Avatar

The mere prescence of consideration normally implies the existence of an

intention to create legal relations (Willitson-1969) if this be the case why do

the two concepts co-exist?

 Many countries have recognised ‘intention to create legal relations’ as separate requirement for

enforcing an otherwise valid contract. English law is the best example in that category, which

requires this along with other requirements of offer, acceptance and consideration. Professor

Samuel Williston criticised this view emanating in England. His opinoin is that the separate

element of intention is foreign to the common law, imported from the Continent by academic

influences in the nineteenth century and useful only in systems which lack the test of

consideration to enable them to determine the boundaries of contract.

 The insistence on a requirement of intention in addition to the other elements of a validly

formed contract of offer, acceptance, and consideration is unnecessary. This view has been taken

not only by Williston in U.S. but also Hepple  in the UK. Hepple argues that the problems with

this area derive largely from a failure to take account of the particular approach to consideration

adopted by Lord Atkin in Balfour v. Balfour (1919). Hepple argues that many domestic

agreements may involve mutual promises, ‘and yet not be contracts because the promise of the

one party is not given as the price for the other’. In other words, the concept of the bargain is

central to the test of enforceability of contracts under English law and the vital elements in the

identification of a bargain are offer, acceptance and consideration. These three elements should

be treated together as indicating bargain. Thus an analysis which tries to separate out agreement

(that is, offer and acceptance) from consideration is missing the point of why the courts started

looking for evidence of these three elements in the first place.

‘This separation of agreement from consideration has resulted in a fundamental point being overlooked. This is that the common law recognised at an early stage that usually parties do not define their intention to enter into legal relations. Consequently, the fact that they have cast their agreement into the form of bargain that is offer, acceptance, and consideration, provides an extremely practical test of that intention. This test of bargain renders superfluous any additional proof of intention.

Accordingly, Hepple regards the court as falling into error in trying to identify an additional element of intention in the cases such as Ford Motor Co Ltd v. AEF 1915. The intention requirement requires the manifestation of objective intention. The argument in effect introduces a rule of formality into the formation contracts. The formal requirements become not writing, or signature, but offer, acceptance and consideration. The parties who fulfil these basic elements will be deemed to have made a bargain, unless proved otherwise.

It is important to note here that many jurisdictions do not recognise ‘intention to create legal relations’ as a separate requirement to enforce an otherwise valid contract. India and China are good examples where there is no separate requirement of proving the intention to create legal relations. It is inferred from the other elements that are present. The element of intention in contract law is vague and lacks certainty as to what it requires actually to prove its presence or absence by a particular party. Therefore, in case of common law countries, where consideration is one of essentials of a valid contract, the requirement of proving ‘intention to create legal relations’ should not be pressed upon.

Join now!

However, intention to create legal relations is an essential feature of contract law in the UK, and the existence of the intention will depend on the nature and form of the contract and the contracting parties.

Here, the law will not necessarily recognise the existence of a contract as enforceable in the courts of law simply because of the presence of mutual promises or consideration. It is necessary to establish also that both parties made the agreement with the intention to create legal relations so that if the agreement is brocken the party offended will be able to ...

This is a preview of the whole essay