Intention to be legally bound
Encyclopedia
Intention to be legally bound is a technical term used in contract law, particularly English contract law
, to denote a court's presumption that parties to an agreement wished it to be enforceable by a court. The doctrine does not in fact look to a party's subjective intentions at all, but reflects a court's general policy to uphold agreements in the commercial sphere of life, and not to interfere within the private sphere.
in his nineteenth century work System des heutigen Römischen Rechts (1840). It had been a prominent concept through the nineteenth century that contracts were based on a meeting of minds
between two or more parties, and that their mutual consent to a bargain, or their intention to contract, were paramount.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
, to denote a court's presumption that parties to an agreement wished it to be enforceable by a court. The doctrine does not in fact look to a party's subjective intentions at all, but reflects a court's general policy to uphold agreements in the commercial sphere of life, and not to interfere within the private sphere.
Classical usage
The concept is closely related to the "will theory" of contracts as espoused by German jurist Friedrich Carl von SavignyFriedrich Carl von Savigny
Friedrich Carl von Savigny was one of the most respected and influential 19th-century jurists and historians.-Early life and education:...
in his nineteenth century work System des heutigen Römischen Rechts (1840). It had been a prominent concept through the nineteenth century that contracts were based on a meeting of minds
Meeting of Minds
Meeting of Minds is a television series, created by Steve Allen, which aired on PBS from 1977 to 1981.The show featured guests who played significant roles in world history...
between two or more parties, and that their mutual consent to a bargain, or their intention to contract, were paramount.
- Household Fire and Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216
- Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256
Modern meaning
While it is generally true that courts wish to uphold the parties' intentions, courts moved in the later half of the nineteenth century to a more objective stance for interpretation, whereby the emphasis moved to the way in which the parties had manifested their consent to a bargain to the outside world. Given this change, it was still said that "intention to be legally bound" was a necessary element for a contract, but it came to reflect a policy about when to enforce agreements, and when not to. In two decisions, Lord Atkin showed that a rebuttable presumption exists that one does not "intend" (ie the court deems the parties) to create a legally enforceable contract in the domestic sphere, but one does in the commercial sphere of life. In Balfour v Balfour a husband promised his wife to pay maintenance while he worked in Ceylon. It was held that between the two there was no "intention to be legally bound". By contrast, in Rose & Frank Co v JR Crompton & Bros Ltd it was held that two business parties did not intend to contract, but only because they had overcome the very strong presumption that commercial agreements are enforceable through the used of expressly worded "honour clause". The parties had expressly stated they did not wish the agreement to be reviewed or enforced by a court.- Merritt v MerrittMerritt v MerrittMerritt v Merritt [1970] is an English contract law case, on the matter of creating legal relations. While under the principles laid out in Balfour v Balfour, domestic agreements between spouses are rarely legally enforceable, this principle was rebutted where two spouses who formed an agreement...
[1970] 2 All ER 760, [1970] 1 WLR 1211 - Jones v Padavatton [1969] 1 WLR 328
- Kleinwort Benson Ltd v Malaysia Mining Corp Berhad [1989] 1 WLR 379
- Baird Textile Holdings Ltd v Marks & Spencer plc [2002] 1 All ER (Comm.) 737
See also
- Meeting of mindsMeeting of MindsMeeting of Minds is a television series, created by Steve Allen, which aired on PBS from 1977 to 1981.The show featured guests who played significant roles in world history...
- ContractContractA contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
- ConsiderationConsiderationConsideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...
- EstoppelEstoppelEstoppel in its broadest sense is a legal term referring to a series of legal and equitable doctrines that preclude "a person from denying or asserting anything to the contrary of that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative...
- Contract theoryContract theoryIn economics, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of asymmetric information. Because of its connections with both agency and incentives, contract theory is often categorized within a field known as Law and economics...