The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:
There are various situations in which a court will hold that an agreement is not binding because, though supported by consideration, it was made without any intention of creating legal relations (see, eg, Blue v Ashley).
Whether or not the parties to a contract have the requisite contractual intention is a question of fact, to be decided by reference to the particular circumstances of each case.
However, the cases recognise that, in certain situations, there is a presumption that such intention will be lacking.
In an ordinary commercial context, it is not normally necessary to prove that the parties to an express agreement in fact intended to create legal relations. Absent proof to the contrary, it will be presumed that the parties did have such intention.
The onus of proving that there was no intention is on the party who asserts that no legal effect was intended and that onus is a heavy one (Edwards v Skyways, Kingswood v Anderson and Barbudev v Eurocom Cable).
In determining whether the onus of proof has been discharged, the court will be influenced by:
the importance of the agreement to the parties
whether one of the parties has acted in reliance on the agreement
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