The Nature of Commercial and Non Commercial Contracts Order Instructions: the concept of intention to be bound in the nature of commercial and non commercial contracts Please divide the work into 2 sections.
the 2nd section would be how the courts view agreements and tests used to determine the intention
The Nature of Commercial and Non Commercial Contracts Sample Answer
Discuss the concept of intention to be bound in the nature of commercial and non commercial contracts, having regard to the necessity of writing, how the courts view agreements and the tests used to determine intention.
Introduction
A valid contract must have an agreement that was made with intentions of making it legally binding among the parties to the contract (Beatson, 2010). The parties must intend to have legal relations between themselves Pettit v Pettit (1970) AC 777 and Hardwick v Johnson [1978] 1 WLR 683.
Consideration plays a critical role as it provides the intention and evidence that the promisor actually specified agreed to exchange his goods with something else in the form of a price or anything of value (McKendrick, 2012). The items exchanged carries or acts as evidence that the parties truly intended to be bound by their agreement and the consideration is the proof or test of their commitment to the contract (Poole, 2012). Once each party has performed his part of the contract then the contract is said to be executed (Beale, 2007: McKendrick, 2011).
When assessing the contract cases, the courts used to apply particular presumptions to different contracts and mostly all domestic and social contracts were literally presumed not have intention to create legal relations while all commercial contracts were all presumed to have legal intentions however currently all the intentions must be proved in a court a law (Brownsword, 2010). The case of Balfour v Balfour provides the basis for determining intentions in a contract. However, commercial contracts that are entered into without any intentions of creating legal relations mostly have clauses that include such words as Honour clauses and which indicate that the relationship is not legally binding as indicated in the case of Wilson v Burnett [2007] EWCA 1170.
The other test that can be applied is the reasonable man’s tests where a reasonable man would decide given the nature of the contract and transactions at hand like in the cases of Jones v Padavattan (1969) 1 WLR 328 and Merritt v Merritt (1970) 2 ALL ER 760.
References
Beatson, J., A. (2010) Burrows and J. Cartwright Anson’s law of contract, Oxford: Oxford
University Press, [ISBN 9780199282470].
Beale, H.G., W.D. (2007) Bishop and M.P. Furmston Contract – cases and materials,
London: Butterworths, [ISBN 0199287368].
Brownsword, R. (2010) Smith & Thomas: A casebook on contract, London: Sweet &
Maxwell, [ISBN 9781847034175].
Wilson v Burnett [2007] EWCA 1170
McKendrick, E. (2012) Contract law: text, cases and materials. (Oxford: Oxford University
Press, [ISBN 9780199699384].
McKendrick, E. (2011) Contract law, London: Palgrave Macmillan.
[ISBN 9780230285699].
Jones v Padavattan (1969) 1 WLR 328
Merritt v Merritt (1970) 2 ALL ER 760
Poole, J. (2012) Casebook on contract law, Oxford: Oxford University Press.
[ISBN 9780199699483].
Pettit v Pettit (1970) AC 777
Hardwick v Johnson [1978
