Intention to create legal relations Essay

forrader formulationing at if the end to make water efficacious dealing should be utilize to replace favor, it is important to look at how these doctrines fit into the native portions in a contract. Their use allow for then be discussed, in concert with the doctrine of promissory estoppel. In evaluating these principles reference go away be make to case practice of decline, judicial comment and of leading contract academics work. Finally, thought will be given to the future of context, and if it is all the same necessary today, when so around(prenominal) other countries earn adopted alternative glide slopees to ensuring that contracts be rachis.In the make-up of contracts two elements are vital. Firstly, the offer, an indication by one person prepared to contract with a nonher, on certain terms, which are fixed, or capable of beingness fixed at the time the offer is make.1 Secondly, on that point moldiness be an acceptance, an unconditional assent to a d efinite offer.2 These two comply to create certainty that a contract has been formed, for, as in Scammell v Ouston (1941),3 if an agreement is uncertain on slightly important issuethe courts will appreciation in that location is no contract.4 Following this, the elements of consideration and intent im furcate the contracts body and substance5So, what is meant by consideration and the inclination to create lawful relations? English law usually requires proof that the parties flip made a bargain, or agreement,6 this is known as the bring in and outrage test. (Currie v Misa (1875))7 or a benefit to one party or a detriment to a nonher.8 So, in practical terms consideration can be defined as what one party in an agreement is giving, or promising, in exchange for what is being given, or squalld, by the other side. 9 This provides mutuality, making the contract enforceable. The Oxford Dictionary of Law definition states, musing is essential to the validity of any contract o ther than one made by bit. Without consideration an agreement non made by accomplishment is not binding it is a nudum pactum ( bleak agreement) governed by the maxim ex nudo pacto non oritur achieve (a right of action does not arise out of a naked agreement.)10 English law does not rely on formalities as a way of identifying intention to create a licitly binding contract.Instead it focuses on offer, acceptance and consideration.11 If these are present, and unless re furtherted by contrary evidence, courts unravel on the basis of two legal presumptions, that there is no intention to be bound in domestic or social arrangements, but there is intention to be bound in commercial agreements.12 prof B.A.Hepple claims that there is no indispensableness of a separate requirement of intention, and that a bargain, involving mutuality is sufficient. These thought processs are not ordinaryly accepted as it is widely agreed that identifying the parties intentions is essential to the role of the courts when establishing if a contract was made.13(mf)It is useful to look at why English law has become so reliant on the consideration element of a contract, and why it has frequently been apply as the badge of enforceability,14 Professor Atiyah argues that consideration originally meant a suit for enforcing an agreement.15 Early forms of contract law mainly involved agreements regarding debt, covenant, or detinue ie., outlaw(a) detention of airscrew, and were only binding if under seal. This method, which required a horizontal surface of form such as writing or a deed, was apply to pr charget fraud and proved that there was an intention to create legal relations. Consideration was first used in the sixteenth ascorbic acid when, in order to enforce informal agreements, the law of assumsit was developed.16 So, while that the law would, tranquillise not enforce merely gratuitous foreshadows, the law had to develop an element that could distinguish between a pr oper contractual agreement, and roughlything less that would not.17 collectible to the Law of Property Miscellaneous Provisions wreak 1989, form is still required for contracts involving the sale of land. It is also used to offer consumers protection in hire purchase and consumer credit agreements. In the English Common law system, a promise is not legally binding as part of a contract except if it is made in a deed or supported by almost consideration. 18 Sir Guenter Treitel Q.C., describes the purpose of consideration as, to throw some legal limits on the enforceability of agreements even where they are mean to be legally binding and are not vitiated by some circumstanceor such as mis channel, misrepresentation, duress or illegality.19This is a attribute found only in English law. In some obliging law countries, promises that in England would not be considered binding due to inadequacy of consideration, can be apply if they gravel been made in some notarised writ ing. The European Civil Law systems were formed around the fifteenth century and based on the Roman Catholic Code of Canon law and the cherish of good faith. Due to this, their courts take the view that all square and sincere agreements are contracts.20 As English law has developed there has been an insistence on the use of consideration and intention to create legal relations in order to enforce a contract. (Balfour v Balfour (1919))21 Although it may not be easy to find consideration in a contract, ( shield v Byham (1956))22 it could be asked why it is thought to be necessary at all.Originally, the base idea of consideration was to show that A had bought Bs promise.23 (Dunlop Pneumatic Tyre Co Ltd v Selfridge & angstrom Co Ltd (1915))24 However, there was a general principle of non-interference in the concerns of other people. Therefore, the doctrine was not strictly enforced it was enough to provide sufficiency of consideration it did not shake up to be adequate. This meant that, the consideration provided by one party need not decent in value the consideration provided by the other party.25(Thomas v Thomas (1842))26 Since this case it was assumed that consideration must have at least some economic value, and that it must be, something which has some value in the eye of the law.27(mf)The use of the word sufficiency also causes uncertainty. Courts have decided it must be real, not as in dust coat v Bluett (1853)28 where a son tried to use a promise to stop complaining over the distribution of his fathers property as consideration. Although, there was an economic element, as a father promised not to enforce the re remuneration of a debt owed to him by his son, it was held that,The son had no right to complain, for the father might make what distribution of his property as he liked and the sons abstaining from what he had no right to do can be no consideration.29 In this case the court took the view that this type of moral obligation could not be us ed as any form of value, in other cases the courts appear to almost be consideration so contracts can be enforced.30 As in Ward v Byham (1956) where happiness was used.In Chappell & Co v draw near Co Ltd., (1960),31 the mob of Lords held that chocolate wrappers needed to buy records in a special promotion were part of the consideration. The wrappers had no monetary value, for upon receipt go ups would simply discard them.32 Therefore, even something valueless could be used as consideration. From this it can be seen that consideration does not guarantee fair play of bargains. Indeed it could be argued that, as this would not fit the benefit and detriment test, this type of nominal bargain33 should not be allowed.This is the most gnarled area of the rules surrounding consideration. To start with, the fact that consideration need not be adequate, just sufficient, means it does not need to be of equal value to that which the other party is offering. This could lead to injustice . There could be some perfectly good reason why A sells his Mercedes to B for a token amount, but what if he is under duress, perhaps being blackmailed by B.34 Similarly, it is quite fair that, as in Stilk v Myrick (1809)35 performance of an animate contractual duty was held to be insufficient consideration. An employee should not be allowed to hold his employer to ransom in this way, unless it is proven that the situation changed significantly, and he has undertaken a substantial extra workload after the promise of extra pay. (Hartley v Ponsonby (1857))36So why do the courts permit the token element in bargains at all? It has been said that, consideration was originally the reason for the enforcement of a promise.37 Therefore, even token bargains have a purpose by providing evidence that the parties take the agreement seriously, and show an intention to create legal relations.The doctrine of consideration was also used was where alteration promises were made regarding the part p ayment of debts. The general rule as established in Pinnels case (1602)38 was that the give of a horse, hawk or robe, etc in satisfaction is good. 39 The assumption being that providing something in consideration might be more beneficial to the complainant than waiting for the money.40 This rule was confirmed in the House of Lords in Foakes v Beer (1884)41. This practical benefit was also the principle in Williams v Roffey Brothers (1990)42 where it was profitable to pay more for the same work. However, the rule in Pinnels cuticle can be avoided by providing extra consideration, altering the way payment is made, by paying earlier, at a different time or place or via one-third party.43 Possibly due to this, the Law decree Committee 1937 recommended the abolition of the rule in Pinnels Case, but so far that has not happened.44Lord Denning tried a different approach with his use of the equitable principle of promissory estoppel. In his obiter statement in Central London Property Trust v High Trees House (1947),45 he stated that, a promise intended to be binding, intended to be acted upon, and in fact acted on, is binding so far as its terms properly apply.46Due to this it was held that a promise could be enforced without consideration if it would be wrong for that person to go back on a promise and there has been a corporate trust on it.47 He based his views on Lord Cairns comments in the earlier equitable going case of Hughes vMetropolitan Railway (1877)48It has been suggested that the promisee must have suffered a detriment from reliance on a promise. Lord Denning denied that this was necessary, claiming that somebody just needed to have acted on the belief induced by the other party. (W J Alan & Co v El Nasr (1972))49. Other limitations exist, promissory estoppel only applies to the variety or discharge of an existing contractual obligation, 50 therefore equity is a shield not a sword, it will not allow someone to use equity to instigate a cause of& nbspaction.51 (Coombe v Coombe (1951)52The promise not to enforce rights must be clear and unequivocal, in The Scaptrade (1983)53 it was held that the fact that they hadnt enforced their full rights in the gone was not sufficient. It must be inequitable for the promisor to go back on his promise, in D & C Builders v Rees (1966)54, Mrs Rees had forced the builders to accept her tab by inequitable means and so could not rely on promissory estoppel,55 for he who comes to equity must do so with low-cal hands. 56 This doctrine is also contrary to the House of Lords decisions in Jorden v money ( 1854)57 and Foakes v Beer (1884)As can be seen from these cases, unlike in the past when a gentlemans word was his bond, people can no longer be relied upon to keep gratuitous promises, however seriously meant. They are also likely to use litigation if they later wish to go back on them. Treitel points out that, the doctrine of consideration has attracted much criticism, 58 as even the most flimsy evidence is given as consideration, so its use has become somewhat dubious. The doctrine is an historical accident that strange systems do without. 59To overcome these problems, Parliament could extend the scope of existing rule by using form to prove the intention to create legal relations in more situations than now. That would mean that although not needed for basic everyday events like shopping, or private domestic arrangements eg., babysitting, all other contracts of a financial or contractual nature would have to have written agreements.As Treitel says, English law does recognise, in the deed, a perfectly safe and relatively simple means of making gratuitous promises binding. 60These would be subject to the usual rules applying to the Sale and Supply of Goods Act 1994, the Consumer Protection Act 1987, the Supply of Goods and Services Act 1982, etc., In the event of a strife regarding a contract with no written agreement, the courts could consider it to be void, as there was no proof of an intention to create legal relations and therefore the contract has no legal effect.Any money compensable out under such a contract would be retrievable and any work that has been done maybe compensated on a quantum meruit basis.61 Care would also have to be taken to ensure the rights of third parties are protected.62 The use of form as proof of the intention to create legal relations would provide a useful safeguard against peak promises.63 Although, this does not solve the problem of action in reliance on an informal promise the court maybe able to give some effect to the promise under the doctrine of waiver or in equity.64