Law Tutors in London – Examining the key elements of legal intention in contracts is essential for understanding how enforceability is determined in contract law. Intention to create legal relations is one of the cornerstones of contract formation. It ensures that an agreement between parties is not merely a casual or informal understanding but one that carries the possibility of legal consequences if breached.
The key elements of legal intention are:
Objective Intention: Courts assess the intention of the parties based on their actions and words rather than their subjective beliefs. This means that even if a party claims they did not intend to create legal relations, the court will examine the surrounding circumstances, such as the formality of the agreement and the context in which it was made, to determine whether the intention was clear.
Context of the Agreement: The setting in which the agreement occurs plays a significant role in determining legal intention. Business or commercial agreements typically carry an implied intention to create legal relations. In contrast, social and domestic arrangements are generally presumed not to involve such intent unless there’s clear evidence to the contrary.
Express Terms: If the contract explicitly states that the parties intend to be legally bound, this strengthens the argument for legal intention. For example, in a written contract, a clause confirming that the agreement is legally binding will often reinforce the intention.
Consideration and Bargaining: A clear indication of a bargained-for exchange, where both parties offer something of value, often signals an intention to create legal relations, particularly in business contracts.
These elements help courts determine whether an agreement should be legally enforced, protecting the rights and obligations of the involved parties.
