The intention to establish legal relations indicates the intention of the parties to conclude a legally binding agreement. This shows that the parties are willing to accept the legal consequences of the agreement, which means that they are serious. Social relations: In the case of industrial relations, the courts do not assume the intention to create a legal relationship. This article focuses on perhaps the most overlooked key criteria; Intention to create legal relationships. However, this principle can be crucial in deciding whether an agreement is legally binding, as evidenced by the recent Blue v Ashley (2017) EWHC case in 1928. The case concerned an agreement between Mr Michael Ashley, owner of Sports Direct Group, and Mr Jeffrey Blue, a management consultant, which stated that while Mr Blue could guarantee the share price of Mr Ashley`s company at more than £8 per share, Mr Blue. Ashley would pay him a £15 million bonus for his services. The deal was struck in a pub with other Sports Direct representatives and the company`s share value rose to over £8, but Mr Ashley claimed the deal was just a “skirmish” and refused to pay the bonus to Mr Blue. Mr Blue then brought an action. In the High Court, Leggatt J. focused on whether there was an intention to establish legal relationships.

The case revolved around the factual context in which the alleged contract was concluded and, finally, the action was dismissed on the ground that, according to the objective test, the social environment did not indicate that a formal contract had been concluded, so that Mr Blue could not rely on the agreement to draw legal consequences from it. This case illustrates the importance of the intention to create legal relationships in the design of a contract as a crucial element of the court`s analysis in practice, which ultimately cannot be undermined. While individuals, and small businesses in particular, may be drawn to the idea of an informal agreement (which can be based on a handshake or gentleman`s agreement), such an informal agreement could be dangerous. This is especially true if the agreement was reached in an environment that is not suitable for normal trade negotiations. For parties who wish to enter into a binding legal contract, it is crucial that they correctly cancel the conditions so that there is no disagreement about the intention of the parties. A subjective approach would be to examine the respective expectations of the parties and examine their state of mind. Although this approach is widely rejected, it allows account to be taken of the fact that communication may lead to misunderstandings or deliberate obfuscation of the facts which, if analysed objectively, may lead to an inaccurate presentation of the actual legal intent. In the worst case, a misunderstanding can lead to the nullity of a contract. In this respect, a subjective approach is an advantage.

The possible gap between an individual`s objective and subjective intentions highlights the problems of a purely objective approach. ⇒ If an agreement is a domestic/family/social arrangement, it is generally accepted that these are not contractual, as the parties probably did not think that their dispute could end in court (i.e. it is unlikely that these parties intended to create legal relationships). ⇒ If the contract is written and indicates that the parties intend to create a legally binding contract, this is usually sufficient. In 1919, in Balfour v Balfour[3] (where a husband promised his wife to pay alimony while working in Ceylon), Lord Atkin argued that there was no “intention to be legally bound” even if the wife depended on payments. There is a presumption that there is no intention to establish a legal relationship between a parent and a child, but this can be rebutted depending on whether or not the language used by the parties expresses such an intention. In this case, Mrs. Jones bought a London house where Ms. Padvatton lived while studying at Lincoln`s Inn. There was a dispute and Ms Jones filed a property lawsuit, but Ms Padvatton argued that her agreement was a legally binding contract and that she could therefore remain in the house until she had completed her bar exams. The thing really boils down to an absurdity when we look at it, because if we were to pretend that there was a contract in this case, we would have to record it in relation to all the more or less trivial concerns of life, in which a woman makes a promise to her at the request of her husband, It is a promise, which can be enforced by law.

[4] ⇒ The existence of an offer, acceptance and consideration may prove that the intention is to establish legal relationships. The party claiming the absence of legal relations must prove this; and all terms that attempt to rebut the presumption must be clear and unambiguous. [16] In Edwards v. Skyways Ltd,[17] an employee was promised a bonus, known as “ex gratia, and it was found to be legally binding. He had relied on the promise when he accepted severance pay, and his employer could not sufficiently demonstrate that he did not intend his promise to become a contractual clause. [18] “Any collective agreement entered into after the commencement of this section will be conclusively deemed not to have been designed by the parties as a legally enforceable contract, unless the agreement: Mr. Blue`s evidence was that Mr. Ashley had promised at a pub meeting with Mr. Ashley and three other Sports Direct representatives (after drinking at least 8 pints of beer), M. to pay a premium of £15 million. Blue if he could ensure that Sports Direct`s share price exceeds £8 per share. .