Intention to Create Legal Relations
In contract law, in order for an agreement to be binding, there is a requirement of an intention to create legal relations between the parties. For an agreement to be legally binding and have an intention to create legal relations, law has created a distinction between two types of agreements: agreements made within social and domestic relations and agreements made in a commercial environment.
- Agreements made in Social and Domestic Relationships:
It is generally presumed under the law that agreements made within social and domestic relations have no legal force. There is no intention to create legal relations between the parties.
Cases: Balfour v Balfour
However, this presumption can be rebutted if one party can provide evidence. For example:
1. A party may provide a written agreement (Errington v Errington )
2. The parties may have separated. (Merritt v Merritt )
3. If there is a third party to the agreement (Simpkins v Pays )Or lastly, if a party acted on his or her detriment in reliance on the agreement (Parker v Clark )
- Agreements made in a Commercial Environment:
Agreements made in a commercial context are generally assumed to hold that the parties involved did intend to create legal relations
Case: Esso Petroleum v Commissioners of Customs & Excise 
This type of agreement can be rebutted if there is evidence to prove otherwise. The defendant must prove to the court that there was no intention to create legal relations or the agreement must expressly state that there is no intention to be legally bound.
Case: Rose & Frank v Crompton Bros