Legal intent - contract law

Intent in contract law refers to having the intention to form a legal contract.

Lord Denning refers to legal intent saying ‘would reasonable people regard this agreement as intended to be legally binding?’

Intent in contract law can be referred to as, having the intention to form a legal contract, it is not sufficient for two parties to be involved in a contract, they must intend creating a legal aspect.

It is possible for an agreement to exist, but for it to be legal there needs to be legal intent.

With regard to legal intent in relation to social and domestic agreements it becomes more difficult suggesting legal intent that would become a contract due to the domestic arrangements between the a husband and wife for example.  There may be an offer and an acceptance and consideration for something to be done in return for something but it could be that there is nothing to make that agreement legally binding.  
In Balfour v Balfour (1919) the following two questions were raised;
  1. Must both parties intend that an agreement be legally binding in order to be an enforceable contract?
  2. Under what circumstances will a court decline to enforce an agreement between spouses?
In this case it was judged there was no legal intent and the case should be settled without legal proceedings. The questions raised were answered as follows
  1. Yes. Both parties must intend that an agreement be legally binding in order to be an enforceable contract.
  2. The court will not enforce agreements between spouses that involve daily life.
On the contrary, in Merritt v Merritt (1970) it was judged that although Mr and Mrs Merritt were still married they were estranged at the time the agreement was made and therefore any agreement between them was made with the intention to create legal relations. In other words there was legal intent.

There is usually legal intent in commercial agreements due to the fact that it generally involves an exchange of goods/services for money.

In the case of Carlill v Carbolic Smoke Ball Co (1893)  the manufacturers of this product claimed, in a public advert, that their smokeballs would stop you catching the flu as long as they were used over a specified period of time.  Mrs Carlill used the product but still caught the flu.  She claimed £100 as the advert said anyone catching the flu whilst using their product could. The manufacturers did not agree and said that their advert could not be referred to as a contract as it was not possible to make a contract with the whole world. The court agreed with the consumer and the contract was deemed to be enforceable and Mrs Carlill was therefore entitled to her £100.

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