Beijing Law Review, 2011, 2, 127-133
doi:10.4236/blr. 2011 23013 Published Online September 2011 (
Copyright © 2011 SciRes. BLR
‘Intention to Create Legal Relations’: A
Contractual Necessity or an Illusory Concept
Bhawna Gulati
International Trade and Economic Laws (CITEL), Jindal Global Law School of O. P. Jindal Global University, Jindal, India.
Received July 20th, 2011; revised August 22nd, 2011; accepted September 1st, 2011.
Intention to create legal relations forms the basic ingredient of any valid contract in many jurisdictions around the
world. The paper argues that such requirement is neither required nor is purposeful if any particular jurisdiction has
Consideration as the basic requirement to prove the formation of validly formed contract. The paper postulates that
consideration in itself is, and should ideally be, indicative of such intention. Therefore, as far as common law coun-
tries are concerned, consideration in itself should be capable of dealing with the intention of the parties and there
should not be any separate requirement of proving an intention to create legal relation. By na tural corollary, the re-
quirement to prove su ch ‘intention’ can be justified in countries where consideration is not a requirement for a form-
ing a valid and legally enforceable contract. The paper, while dealing with the proposed postulations, also deals with
the difference in presumption with regard to such intention while dealing with contractual relations that arise in do-
mestic set-up as differing from those arising in a commercial set-up.
Keywords: Contrac t Law, Intention to Create Legal Relations, Domestic Contracts, Contract Law Theories,
1. Introduction
The requirement of ‘Intention to create legal relations’
constitutes one of the most significant conditions of a
valid contract in many jurisdictions around the globe—
both developed and developing. Allegedly, Contract Act,
being an Act governing relations between private parties,
cannot be interpreted in the court of law without giving
much weightage to the intention of the parties forming
such contract. To prove the existence of ‘intention to
create legal relations’ in addition to prove the existence
of ‘consideration’ becomes quite burdensome at times.
English Law specifically requires the existen ce of ‘inten-
tion to create legally binding contract’ for enforcing a
contract despite the existence of ‘consideration’ for the
contract. The main argument of this paper is that ‘con-
sideration’ in itself is, and should ideally b e, indicative of
such intention. Therefore, as far as common law coun-
tries are concerned, ‘consideration’ in itself should be
capable of dealing with the intention of the parties and
there should not be any separate requirement of proving
an ‘intention to create legal relation’. By natural corol-
lary, the requirement to prove such ‘intention’ can be
justified in countries where ‘consideration’ is not a re-
quirement for a forming a valid and legally enforceable
contract. This will hold good for the countries based on
civil law system. But the requirement of proving such
intention in common law countries have been criticised
by scholars and require immediate action by the legisla-
ture and judiciary.
It is pertinent to no te that there is a divide between the
common law countries where the western countries e.g.
U.S and U.K. require the establishment of ‘intention to
create legal relations’ in addition to the existence of ‘con-
sideration’, but emerging economies like India and China
does not requir e it.
Moreover, to decide whether such an intention is pre-
sent in a particular agreement between the parties, the
court starts with initial presumptions depending upon
whether the agreement is originating in a domestic set-up
or is it purely a commercial transaction. Disentangling
domestic influence from the commercial transaction be-
comes difficult in some situations due to increasing in-
teraction between the familial relations and commercial
relations, thereby blurring the distinction between do-
mestic contracts and commercial contracts. This takes a-
way the logic for having different presumption in such
‘Intention to Create Legal Relations’: A Contractual Necessity or An Illusory Concept
extricable situation. Besid es, ‘intention’ itself is a decep-
tive concept as th e real intention might never come to the
knowledge of the interpreter and in such situations the
dilemma of how to gather the ex istence or non-existence
of such intention haunts the very decision based on it.
Another problem arises when parties to the contract
comes from different social and cultural background and,
therefore, perceive differently in a given situation. This
problem of different perception is even more complex
than the problem arising in the case of manipulative hu-
man tendencies. The author is conscious of the fact that
the courts, in different jurisdiction s, have dealt with such
issues differently. The paper, however, is based more on
the theoretical argument of whether ‘intention to create
legally binding relations’ is worthy enough to be re-
garded as a separate requirement for contract law? Or
else can it be considered a part of the requirement of
‘consideration’ because consideration to a large extent
indicates intention of the party from whom it is moving.
2. Why Contract Law: An Inquiry into
Contract Law Theory
‘I cannot marry you’ said the En glish boy. ‘But you pro-
mised me that you will marry me’ pleaded the girl. ‘Pro-
mises are made to be broken’ answered the boy. ‘But
what about the ti me I inve sted in this relationship?’ asked
the girl. It feels quite obnoxious to think of the fate of
such conversations that make people helpless when a
promise is broken or an obligation remains unfulfilled.
One wonders at times that why contract law, as existing
in some countries e.g. U.K., that has the ability to hold
anyone responsible to pay 2 dollars for a cup of coffee,
leaves the boy (in the illustration) free from any obliga-
tion. What is so peculiar about domestic/personal rela-
tions that keeps them out of courts’ interference and
rather make them go unattended and disregarded, even
though the damage can be much more than in case of any
commercial breach of promise?
This is not a rarest of the rare cases that takes one to
the dilemmatic situatio n of rival contract theories. Such a
perplex question has been talked quite a lot by the scho-
lars interested in the theory of contractual intention and
ancillary subjects.
That brings us aptly to discuss briefly the primeval
question of contract law theory, i.e. why contracts are
enforced? Different theories have divergent views to deal
with this question. ‘Will theory’ of contract law main-
tains that commitments are enforceable because the pro-
misor has “willed” or chosen to be bound by his com-
mitment.” According to the classical view, the law of
contract gives expression to and protects the will of the
parties, for the will is something inherently worthy of
respect.” [1] Since the theory is will ba sed and is binding
because the parties freely assumed the contractual obli-
gations, the enforcement will not be morally justified
unless the person subjected to the performance obligation
has made a genuine commitment. This draws the atten-
tion of the enfo rcer to the subjective intention of the pro-
misor at the time the promise was made. However, such
situations sometimes lead to a dilemma where the con-
tract interpreter or enforcer has to choose between the
subjective intention of the promissor and the expectations
of the promissee from such a promise. If the secret direc-
tion of the intention, said every man of sense, could in-
validate a contract, where is our security? And yet a
metaphysical schoolman might think, that where an in-
tention was supposed to be requisite, if that intention
really had no place, no consequence ought to follow, and
no obligation be imposed [2].
It is pertinent to note that under the will theory the
contract is enforceable because it is intended by the par-
ties out of their free will. But how far the theory is going
to provide appropriate results when objective intention
differs from the subjective intention? The law enforces
obligations which parties appear to have assumed rather
than those which they have actually assumed. The scope
of voluntary undertaking (consent) is further stretched to
include implied and even imputed promises and so may
be taken ‘far beyond anything remotely clos e to what the
parties had in m ind [3] .
Another theory explaining the enforceability of con-
tracts is the theory of private autonomy. The principle of
private autonomy “simply means that the law views pri-
vate individuals as possessing a power to effect, within
certain limits, changes in their legal relations.” [4] Auto-
nomy theory argues that people should be free to make
worthwhile choices. Another theory is that of consent
which stands for the proposition that a contract is a pro-
duct of wilful interacting individuals. All the above
stated theories require, theoretically at least, the exercise
of free will and manifestation of intention for undertak-
ing certain obligation. The rule, as stated in Rose and
frank Co v. JR Crompton & Bros Ltd [5], is ‘to create a
contract there must be a common intention of the parties
to enter into legal obligations, mutually communicated
expressly or impliedly.’ But n ot in the real world the will
is so ‘free’ and the intention is so explicitly manifested.
A person’s will may be influenced by the limited experi-
ences he encounters in his life and it might also depend
on the perceptions being shaped due to the surrounding
circumstances. An illustration will help explaining the
point more clearly: An Indian went to a Singaporean ho-
tel and ordered a vegetarian pizza. When it was served,
he noticed with surprise that it had sea food in it. The
pizza which was non vegetarian as per Indian standards
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‘Intention to Create Legal Relations’: A Contractual Necessity or An Illusory Concept129
was a perfectly vegetarian pizza according to Singapo-
rean experience. Notably, both the Indian and the hotel
owner were willing to perform the contractual obligation
but both had different perceptions of a vegetarian pizza.
How will the contract law theories or the courts enforc-
ing contract law principles deal with such situations is
not very clear.
The very justifications for not enforcing the familial
contracts, as provided by courts in various cases, are
based on fallacious premises. In Balfour case [6], Lord
Atkin stated that domestic contracts are not contracts as
the parties did not intend that they should be attended by
legal consequences. But this applies even to the comer-
cial transactions like in the coffee case illustrated earlier.
Many a times the parties do not contemplate legal con-
sequences unless the other party commits breach.
However, with the changing times and changing di-
mensions of familial relations, this attitude towards so-
cial agreements seems to have changed. Freeman classi-
fies Balfour v Balfour [6] as a ‘Victorian Marriage’ and
sees the marriage of today ‘less regulated’ and ‘more
dependent upon individual choice.’ For him ‘Marriage
has become a ‘personal rather than a social institution.’’
He pleads for a change in the treatment of presumptions
in domestic spheres [7].
Noteworthy, there are many laws which interfere in
domestic relations between parties and thereby witness
the most personal arrangement which the human beings
try to protect from outside intervention. Legislations re-
garding Family Law, Divorce Act, Succession Act, etc,
are some illustrative pieces of legislation. Considering
the changing nature of domestic/social relations, the
court should not differentiate the inten tion that th e parties
had in mind while dealing in their personal or commer-
cial matters. Therefore, the traditional practice of shifting
burden of rebuttal of the presumption of ‘intention to
create legal relations’ in such contracts is unreasonable
and lacks justifiable ba sis.
Relational contract theorists argue that commercial re-
lationships ‘are not governed by contractual intentions,
but reflect a variety of influences, including social norms
and the norms of conduct that develop within the rela-
tionship’ [8 ]. More often than not, the parties d o provide
for, in detail, all the contractual terms and consequences
that will flow from a particular transaction. In su ch cases
it is grossly unreasonable to go in to the question of what
the parties intended at the time they entered into a con-
tract. In both types of arrangements, domestic as well as
commercial, asking what the parties intended at the time
of contracting may be ‘an utterly unreal question, since
in all probab ility the parties did not con sider the question
at the time of the inception of the agreement’ [9].
In both commercial and family arrangements, rela-
tional contract theory indicates that the parties are more
concerned with the preservation of ongoing relationships
than with the availability o f legal san ctions. In bo th types,
at the outset of the arrangements the parties may not sub-
jectively consider it likely that contract law will control
or regulate their arrangements. They may instead rely on
social or relational norms to do the job. Relational re-
searchers have demonstrated that in business relation-
ships, as well as family relationships, ‘co-operation with-
out reference to legal entitlements is normal’ [10]. In
both commercial and family agreements, the long-term
nature of the relationship and related agreement impedes
the ability to settle finally all terms at the time of co ntract
formation. Therefore, to draw a demarcation on the basis
of different intention prevailing in the minds of the par-
ties is ill founded.
Analysing the changing scenario prevailing in modern
day domestic set up and considering the drastic trans-
formation in the way people perceive their relationships,
it is apparent that dividing line between the domestic and
commercial contracts is shrinking. People are becoming
more and more commercial even in familial relatio ns and
security of transaction is becoming a matter of priority.
In such situation the legal requirement of the parties’
intention to be contractually bound continues to impede
the enforcement of family contracts. The distinction be-
tween commercial contracts, which are presumptively
enforceable, and family contracts, in which intention
must be proved, cannot be justified. The very reasons for
which the different presumptive in tention theory evolved
between commercial and domestic contracts become
otiose. If the requirements of consideration and agree-
ment are thought to be inadequate to distinguish enfor-
ceable from unenforceable arrangements, then a more
appropriate method needs to be devised to achieve this
purpose than one which is ostensibly focused on a ficti-
tious inquiry as to party intention, and which actually
masks an anachronistic and inappropriate judicial senti-
ment [11].
3. Intention: Objective or Subjective
After focussing on different theories of why contracts are
enforced and then placing ‘intention to create legal rela-
tions’ in each of those theories, the next discussion
should aim at analysing various standards (objective and
subjective) used b y Eng lish Courts while finding wheth er
such intention exists or not. This part of the paper will
examine the different approaches employed by courts
while dealing with the issue of ‘intention’ in any particu-
lar contract. What intention do the courts take into ac-
ccount while dealing with different situations before
them—the ‘subjective’ intention or the ‘objective’ inten-
tion? In Merritt v. Merritt [12], Lord Denning held “…
Copyright © 2011 SciRes. BLR
‘Intention to Create Legal Relations’: A Contractual Necessity or An Illusory Concept
the court does not try to discover the in tention by looking
into the minds of the parties. It looks at the situation in
which they were placed and asks itself: Would reason-
able people regard this agreement as intended to be le-
gally binding?” Also in Smith v Hughes [13] it was de-
cided that a person’s conduct with regard to the quality
of the subject matter proposed by the other party is de-
termined by the reasonable man regardless of the per-
son’s actual intentions.
However, Courts usually try to cloth the doctrine of
intention using th e objective intention hypothesis. One is
generally bound to do what a reasonable in terpretation of
one’s behaviour implies and not to what he had in mind.
If one party has a secret intention then that intention is
void. The objective test of intentions is one of the rules
of engagement necessary to protect the integrity of the
contracting process and to prevent its abuse. Holding par-
ties to the objective stan dard not only prevents them from
reneging on their under takings but also g ives them strong
incentives to take care not to misrepresent their own in-
tentions (even innocently) nor to misinterpret the inten-
tions of others and also extends the practice beyond on-
going relationships where it would otherwise not exist
Having discussed the policy justification for courts’
favouritism of objective intention over subjective inten-
tion, one should not forget that such a choice of objective
over subjective intention might not always lead to equi-
table justice to the parties. Some philosophers argue that
autonomy theory leads to social justice but what about
the justice to the parties. When the whole contract re-
volves around party autonomy and party chosen obliga-
tions then why under the garb of objectivity the subjec-
tive interpretation is suppressed. It is true that objective
standard prevent parties from reneging on their under-
taking but when the promissor never intended to under-
take the obligatio n, which though objectively arise in the
facts and circumstances of a particular case, objective
standard is too burdensome. At times it is quite probable
that the parties perceive different meaning for the same
set of words. This is most common when parties belong
to different cultural set up and cross cultural differences
that influence their tak e on different situations.
In some cases there is also another problem of how
and when a contract is said to be formed. The presence of
consideration is often indicative of the intention to create
legal relations, though there are situations where the
presumption of the intention can be rebutted, thus deter-
mining that there is no contract and no legal liability.
Additionally the courts require ‘intention to create legal
relations’ as an essential ingredient apart from the estab-
lishment of other prerequisites to prove the validity of
any contract and rely on the presumptive intention theory.
The next section deals with the different presumptions
that the courts use depending upon whether the contract
is a domestic contracts and commercial contracts i.e.
whether the parties are placed in a domestic set-up or
whether they are related to each other in a commercial
4. Presumption of ‘Intention’—Domestic v.
Commercial Contracts
This part illustrates the difference in presumption which
is employed by the courts while dealing with the ques-
tion of intention in cases of contracts arising in domestic
set-up as opposed to those arising in commercial set-up.
In domestic agreements, for example those made be-
tween husbands and wives and parents and children,
there is presumption of no intention to create legal rela-
tions and no intention that the agreement should be sub-
ject to litigation. In contrast to this, there is a rebuttable
presumption in commercial agreements that the parties
intend to create legal relations. While there are conflict-
ing legal authorities on whether specific facts involving
familial relations result in binding and enforceable agree-
ments, it seems settled that in do mestic agreements there
is a rebuttable presumption that the parties do not have
intention to create legal relations. However the problem
arises when the contract is formed in such intermingled
circumstances that it is not clear whether the transaction
is purely domestic or whether it is commercial. The most
common example that will illustrate this situation is
found in many Asian countries i.e. family businesses.
Suppose the nephew is asked by his uncle to look after
the accounts of the business, can the nephew take the
uncle to the cou rt for the sum of mone y due for services?
Yet another example can be nephew attending the pro-
fessional tutorial classes conducted by uncle. Can the
uncle make the nephew pay under the law of contract?
The uncle may as a matter of fact prove his case and
make the nephew pay for the tuition provided but the
catch in the situation is that if we take the traditional
presumption theory of ‘no intention to create binding
legal relations in domestic/social contracts, the promissee
(uncle) is unnecessarily burdened to rebut the presump-
In the era of modern contract law theory, the distinc-
tion between the public and private and between the
market and the family seems quite otiose [11]. Even if
we take the husband-wife cases, in the past, brides and
grooms traditionally pro mised to “love, honour and cher-
ish” as part of a lifetime commitment. But these days,
high divorce rates and a healthy scepticism now affect
our notions of romance, and more precise statements
about a couple’s obligations may be needed.
As stated earlier, the court, in Balfour v Balfour [6],
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‘Intention to Create Legal Relations’: A Contractual Necessity or An Illusory Concept131
held that the agreement was a purely social and domestic
agreement and therefore it was presumed that the parties
did not intend to be legally bound. Similarly in Jones v
Padavatton [15], the court held that the agreement was
purely a domestic agreement which raises a presumption
that the parties do not intend to be legally bound by the
agreement. In the latter case the daughter left her secured
job relying on the promise made by the mother. If the
promise cannot be enforced where is the security of
transactions? Under the cover of domestic relations the
promisor can exploit the promissee without any obliga-
tion enforceable in the court of law by the promissee
against the promisor. The court could have reached the
same decision and decided the case in favour of the mo-
ther on the ground that the daughter could not perform
effectively her part of the obligation, since she could not
complete her studies. But the court seems to have chosen
the easy way out of denying the presence of any intention
to create legal relations. But why the promissee should
be taxed so heavily for relying on the promise made by
the close family member? Even if we look at the dome-
stic contracts involving husband and wife one can easily
make out the clear serious intention when the promise is
being made but just because the parties are in amity and
have cordial relations, the promissee is burdened to prove
the intention to create a legal transaction. If the parties
can show the presence of offer, acceptance and consi-
deration, there should not be a separate requirement of
proving intention to create legal relations. It is very dif-
ficult to even show the consideration in such cases be-
cause of the nature of consideration is quite different
from the apparent economic consideration present in the
commercial transactions. What if a husband promises to
give a monthly allowance of $ 300 to his wife in return
of the wife promising to leave her job and take care of
the house? The courts will not enforce such a promise
holding that it’s too personal and familial to be dragged
in the cou rt of law. Or even if the court enforce, the wife
have to undertake the burden of proving the intention to
create binding legal relations. Just because the promise
was made when parties were happily living with each
other resolves the husband, prima facie, from performing
his promise. What about the wife who sacrificed her ca-
reer relying on the husband’s promise. Why the courts
have to look into the external factors of how happy or
cordial the marital relations were? Ironically it is only
when the parties are in complete harmony that the hus-
band will realise and ackn owledge the worth of th e sacri-
fice being made by the wife. Once they are on the verge
of separating, why will he pay the wife for promises she
kept throughout the matrimony.
Contract law is about giving effect to the promises
made by the parties exercising their free will and auton-
omy. The court does not have to go into the obscure
question of whether parties contemplated that they can
go to the court to get their promises enforced. If I walk
into the cafe and order a coffee, it will neither occur to
me nor to the cafe owner that we are binding each other
in a legally binding relationship unless one of us fails to
perform. And even if it occurs or we foresee such a con-
sequence of dealing for a cup of coffee, is this promise
more serious than the one made between the husband and
wife which led the wife to leave her job. In domestic
contracts, parties are most unlikely to have considered
the question of enforcement of their agreement at all, so
proof of an actual intention or lack thereof, is impossible
in almost all cases. Requiring proof of intention imposes
a considerable impediment to the enforcement of non-
commercial contracts, which carries with it attendant
risks and costs [16]. Husbands and wives in the basic
family home pattern often have divergent interests which
have not always been appreciated by the courts.
While discussing the dilemma that one might reach in
certain cases where it is difficult to assume the presu mp-
tion against the ‘intention of creating legal relations’, S
Hedley [17] gave an interesting example in following
“The fallacy to be avoided ..... consists of asking the
question ‘whether there is a contract?’, but forgetting
that a court is almost invariably faced with a particular
claim based on an alleged contract. The perspective
given by the claim made alters everything. Take variation
of the classic academic conundrum in this area: Jack and
Jill agree to go out to d inner and to split the bill. By ask-
ing the academic question ‘Is there a contract?’ we are
immediately in the realm of the abstract. If however we
approach the matter form a practical standpoint, we
must know what claim is being made. If Jill is suing Jack
because Jack has refused to go to dinner at all, the argu-
ments against liability are compelling. Surely, Jack can-
not be taken as giving an outright commitment to go to
dinner—what if he is ill, or they cannot agree on a suit-
able restaurant? But imagine that the two already had
their dinner, for convenien ce Jill pays the bill in full, but
jack subsequently refuses to pay in half. The perspective
changes. It is no longer obvious that the contract cannot
be enforced.”
It is ironic that contract, treated in the market context
as the most appropriate vehicle for regulation of private
arrangements between individuals, is not regarded as an
enforceable mechanism for regulating private arrange-
ments between individuals within the home [11]. The
‘apparent intentions’ of the parties are no more than a
smokescreen for policy choices about the relationship
between law and the private, domestic sphere, which
seem based on unsophisticated assumptions about what is
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‘Intention to Create Legal Relations’: A Contractual Necessity or An Illusory Concept
‘natur al’ in that cont ext [9].
Keeping the above stated analysis in mind, it appears
that the line dividing the presumption of intention to cre-
ate legal relation in domestic and commercial contracts is
illusory and is often used by the courts to give effect to
numerous policies under the guise of estimating the par-
ties’ contractual intent. Having thus reached the conclu-
sion that no such demarcation should be considered rele-
vant in the contract law, one encounters an obvious ques-
tion, which does not, though, have an obvious answer.
Whether the requirement of intention to create legal rela-
tions is indeed required and whether it serves any pur-
pose different from the other requirements e.g. offer,
acceptance and consideration? Though, theoretically it is
easier to postulate that a promise made within the do-
mestic setting or between family members raises pre-
sumption of ‘no intention’ to create legal relations and
commercially the presumption of presence of such inten-
tion, this supposition creates more problems and only
confuses the whole state of affairs. Th e author, th erefor e,
strongly feels that the presumption starts from the basic
fallacy and it should be done away with in light of the
changing nature of ‘familial’ relationships.
5. ‘Intention’ and/or ‘Consideration’
As laid down earlier that many countries have recognised
‘intention to create legal relations’ as separate require-
ment for enforcing an otherwise valid contract. English
law is the best example in that category, which requires
this along with the tri-requirement of offer, acceptance
and consideration. This part of the paper will focus on
the correctness of such an approach by looking from a
theoretical as well as practical standpoint. Professor Sa-
muel Williston [18] in the U.S. have criticised this view
emanating in England. He opined that the separate ele-
ment of intention is foreign to the co mmon law, imported
from the Continent by academic influences in the nine-
teenth century and useful only in systems which lack the
test of consideration to enable them to determine the
boundaries of contract [19]. The insistence on a require-
ment of intention in addition to the other elements of a
validly formed contract (offer, acceptance, consideration)
is unnecessary. This view has been taken not only by
Williston in U.S. but also Hepple [20 ] in the UK. Hepple
argues that the problems with this area derive largely
from a failure to take account of the particular approach
to consideration adopted by Lord Atkin in Balfour v.
Balfour. Hepple argues that many domestic agreements
may involve mutual promises, ‘and yet not be contracts
because the promise of the one party is not given as the
price for the other’. In other words, the con- cept of the
bargain is central to the test of enforceability of contracts
under English law and the vital elements in the identifi-
cation of a bargain are offer, acceptance and considera-
tion. These three elements should be treated to- gether as
indicating bargain. Thus an analysis which tries to sepa-
rate out agreement (that is, offer and acceptance) from
consideration is missing the point of why the courts
started looking for evidence of these three elements in
the first place [21].
‘This separation of agreement from consideration....
has resulted in a fundamental point being overlooked.
This is that the common law recognised at an early stage
that usually parties do not define their intention to enter
into legal relations. Consequently, th e fact that they have
cast their agreement into the form of bargain (offer, a-
cceptance, consideration) provides an extremely practical
test of that intention. This test of bargain renders super-
fluous any additional proof of intention [20].
Accordingly, Hepple regards the court as falling into
error in trying to identify an additional element of inten-
tion in the cases such as Ford Motor Co Ltd v. AEF [22].
The intention requirement requires the manifestation of
objective intention. The argument in effect introduces a
rule of formality into the formation con tracts. The formal
requirements become not writing, or signature, but offer,
acceptance and consideration. The parties who fulfil
these basic elements will be d eemed to have made a bar-
gain, unless pr oved otherwise.
It is important to note here that many jurisdictions do
not recognise ‘intention to create legal relations’ as a se-
parate requirement to enforce an otherwise valid contract.
India [23] and China are good examples where there is
no separate requirement of proving the intention to create
legal relations. It is inferred from the other elements that
are present. The element of intention in contract law is
vague and lacks certainty as to what it requires actually
to prove its presence or absence by a particular party.
6. Conclusions
The discussion on the subject of ‘intention’ as one of the
important ingredient of a valid contract is well debated
by not only scholars but also courts. The paper has at-
tempted to unfold the various aspects spinning around
that discussion. The paper strongly argues for abandon-
ing the requirement of proving ‘intention to create legal
relations’ in case of countries that requires the existence
of ‘consideration’ for forming a valid and enforceable
contract. Therefore, in case of common law countries,
where consideration is one of essentials of a valid con-
tract, the requirement of proving ‘intention to create legal
relations’ should not be pressed upon. The consideration
in itself can be taken as a proof strong enough to indicate
the presence of intention of forming a legally binding
contract. Professor Williston pointed out this proposition
stating that the common law does not require any po-
opyright © 2011 SciRes. BLR
‘Intention to Create Legal Relations’: A Contractual Necessity or An Illusory Concept
Copyright © 2011 SciRes. BLR
sitive intention to create a legal obligation as an element
of contract….A deliberate promise seriously made is
enforced irrespective of the promisor’s views regarding
his legal liability [18].
[1] Cohen, “The Basis of Contract,” Harvard Law Review,
Vol. 46, 1933, pp. 553, 575.
[2] D. Hume, “An Inquiry Concerning the Principles of Mo-
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[3] M Chen-Wishart, “Contract Law,” Oxford University
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[5] Rose and Frank Co. v J. R. Crompton and Bros Ltd., 2
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[6] Balfour v. Balfour, 2 KB 517, 1919.
[7] M. Freeman, “Contracting in the Haven: Balfour v Bal-
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[12] Merritt v. Merritt, 1 WLR 1211, 1970.
[13] Smith. v Hughs, LR 6 QB 597,1871.
[14] M. Chen-Wishart, “Objectivity and Mistake: The Oxy-
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[15] Jones v. Padavatton, 1 WLR 328, 1969.
[16] Todd v. Nicol, SASR, 1957, pp. 72, 77.
[17] S. Hedley, “Keeping Contract in its Place: Balfour v. Bal-
four and the enforceability of Informal agreements,” Ox-
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v. Abdul Hussain, 3 SCC 562, 1988.