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INTENTION TO CREATE LEGAL RELATIONS

LAW OF CONTRACT | Page 4 of 6
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binding consequences. In this case, the court of Appeal held that there was an intention to create a legally binding relationship between the husband and wife. Social agreement between friends do not usually amount to an enforceable contract because parties do not intend to bound by such agreement. For instance, if A, B, C and D agrees to be fueling E’s car and returned E give them a rid. If E than decided not to give them a rid again they cannot sue E to enforce the agreement. Commercial Agreement There is a strong presumption of contractual intention in commercial agreements. This presumption may generally be rebutted express or implied words. Thus, in Rose and Frank & Co. v. Gompton Bross (1923) 2 KB 261, the parties provided that a sole agency agreement should not be subjected to legal jurisdiction in the courts. The House of lords stated that the clear words used rebutted the presumption of legal consequence. However, in commercial agreement there are two instances stand out where defendant have been advanced the plea of absence of contractual intention. These are: i. Mere puffs This is where the parties assert that the promise was a mere puff in such a situation, it is the test of a reasonable man that is applied to determine whether the promise is a mere puff or not. For instance, advertisement which claims that Cadbury Bournvital will make the drinker the faster runner in the world or those who use respondent toothpaste will became a successful business person. Such claims are mere puffs. Agreement contains a clause that expressly excludes contractual intention. The most common example is to be found in football poll agreement stakers and the pools There is always a clause in football coupons states: “It is a basic conditions of the sending in and