Intention to create legal relations Essay

Before looking at if the plan to micturate juristic traffic should be occasiond to replace love, it is grand to look at how these doctrines check over into the essential grammatical constituents in a experience. Their utilise will then be discussed, together with the doctrine of promissory estoppel. In evaluating these principles reference will be made to case lawfulness, judicial observe and of leading contract academics work. Finally, thought will be given to the succeeding(a) of friendliness, and if it is still necessary today, when so m whatever an different(prenominal) countries discombobulate pick out alternative approaches to ensuring that contracts be stick to.In the formation of contracts dickens founders are vital. Firstly, the offer, an recitation by one person prepared to contract with a nonher, on authentic terms, which are fixed, or capable of being fixed at the season the offer is made.1 Secondly, there must be an enounce meaning, an uncond itional give in to a definite offer.2 These two combine to create certainty that a contract has been formed, for, as in Scammell v Ouston (1941),3 if an musical arrangement is uncertain on about important issuethe courts will hold there is no contract.4 Following this, the elements of consideration and intent nominate the contracts proboscis and substance5So, what is meant by consideration and the figure to create judicial dealing? face law usually requires proof that the parties have made a bargain, or agreement,6 this is known as the benefit and in nearice 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 augurd, by the different side. 9 This provides mutuality, making the contract enforceable. The Oxford Dictionary of practice of law definition states, Consideration is essential to the validity of any contract other than one made by deed. Without consideration an agreement non made by deed is non binding it is a nudum pactum (naked agreement) governed by the maxim ex nudo pacto non oritur action (a right of action does non arise out of a naked agreement.)10 English law does not rely on formalities as a way of identifying intention to create a legally binding contract.Instead it focuses on offer, acceptance and consideration.11 If these are present,and unless rebutted by contrary evidence, courts operate 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 take in of a separate requirement of intention, and that a bargain, involving mutuality is sufficient. These views are not generally accepted as it is widely agreed that identifying the parties intentions is essential to the subroutine of the courts when establishing if a contract was made.13(mf)It is useful to look at wherefore English law has become so reliant on the consideration element of a contract, and why it has frequently been utilize as the badge of enforceability,14 Professor Atiyah argues that consideration originally meant a priming for enforcing an agreement.15 Early forms of contract law mainly involved agreements regarding debt, covenant, or detinue ie., wrongful detention of property, and were just now binding if under seal. This method, which required a degree of form such as writing or a deed, was used to prevent fraud and proved that there was an intention to create legal relations. Consideration was first used in the sixteenth century when, in tack together to enforce informal agreements, the law of assumsit was developed.16 So, while that the law would, still not enforce merely gratuitous promises, the law had to develop an element that could distinguish between a proper contractual agreem ent, and something less that would not.17 out-of-pocket to the Law of Property multifaceted Provisions spell 1989, form is still required for contracts involving the sale of land. It is alike used to offer consumers protection in hire purchase and consumer realization agreements. In the English Common law system, a promise is not legally binding as part of a contract take away if it is made in a deed or supported by some consideration. 18 Sir Guenter Treitel Q.C., describes the purpose of consideration as,to put some legal limits on the enforceability of agreements even where they are intend to be legally binding and are not vitiated by some factorsuch as mistake, misrepresentation, duress or illegality.19This is a peculiarity found only in English law. In some civil law countries, promises that in England would not be considered binding collect to lack of consideration, can be enforce if they have been made in some notarised writing. The European Civil Law systems were forme d around the fifteenth century and based on the papistical Catholic Code of Canon law and the apprize of good faith. Due to this, their courts take the view that all lawful 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 golden to find consideration in a contract, (Ward v Byham (1956))22 it could be asked why it is thought to be necessary at all.Originally, the basal idea of consideration was to show that A had bought Bs promise.23 (Dunlop Pneumatic Tyre Co Ltd v Selfridge & 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 have to be adequate. This meant that, the consideration provided by one party call fo r not equal in value the consideration provided by the other party.25(Thomas v Thomas (1842))26 Since this case it was take for granted that consideration must have at least some scotch 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 White v Bluett (1853)28 where a son well-tried to use a promise to stop complaining over the diffusion of his fathers property as consideration. Although, there was an economic element, as a father promised not to enforce the repayment 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 dispersal 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 used as any form of value, in other cases the courts appea r to almost invent consideration so contracts can be enforced.30 As in Ward v Byham (1956) where happiness was used.In Chappell & Co v Nestle Co Ltd., (1960),31 the dramatics of Lords held that chocolate wrappers needed to steal records in a special promotion were part of the consideration. The wrappers had no fiscal value, for upon receipt Nestles would simply discard them.32 Therefore, even something worthless could be used as consideration. From this it can be seen that consideration does not guarantee fairness 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 chuck up the spongeed.This is the most problematic 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 dead good re ason why A sells his Mercedes to B for a token amount, but what if he is under duress, mayhap being blackmailed by B.34 Similarly, it is quite fair that, as in Stilk v Myrick (1809)35 performance of an existing 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 considerable bare(a) 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 payment of debts. The general rule as e stablished in Pinnels case (1602)38 was that the gift of a horse, hawk or robe, etc in gratification is good. 39 The assumption being that providing something in consideration might be much beneficial to the plaintiff 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 advantageous to pay more for the same work. However, the rule in Pinnels Case can be avoided by providing extra consideration, neutering the way payment is made, by paying prior, at a divergent time or place or via tercet party.43 Possibly due to this, the Law revision 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 state d 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 opinion on it.47 He based his views on Lord Cairns comments in the earlier equitable waiver 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 someone 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 modification or discharge of an existing contractual obligation, 50 therefore rightfulness is a shield not a sword, it will not allow someone to use equity to instigate a cause ofaction.51 (Coombe v Coombe (1951)52The promi se 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 retiring(a) 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 check by inequitable means and so could not rely on promissory estoppel,55 for he who comes to equity must do so with new hands. 56 This doctrine is also contrary to the House of Lords decisions in Jorden v specie ( 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 foreign systems do without. 59To overcome these problems, Parliament could extend the scope of existing enactment 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 bitterness 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 stipendiary 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 flowerpromises.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