3.3 Intention to create legal relations

The parties intend that legal consequences attach to their agreement. In short, the parties intend that the agreement will be binding with recourse to some external adjudicator (a court or arbitrator) for its enforceability[, i.e. intention to sue if things were to go wrong in the performance of a contract.]

In the case of domestic and social agreements, it is presumed that there is not an intention to create legal relations. In the case of commercial agreements, it is presumed that there is an intention to create legal relations. In either instance, the facts of the case may displace the presumption the law would otherwise make. For example, it may be that when neighbour A agreed to mow neighbour B’s lawn in exchange for the apples on B’s apple tree, both parties intended that this agreement would be legally enforceable.[1]

[1] Ch 4.1, Element of the Law of Contract (2009), Study Guide, University of London International Programme, Catherine MacMillan & Richard Stone.