Intention to Create Legal Relations
For an agreement to be legally enforceable, it must be entered into with the intention of creating a legal relationship
Social or domestic arrangements: There are several social arrangements that do not constitute a contract because they are done without an intention to create legal relations. Some examples include:
- Providing residential accommodation to a relative or close friend without a contract.
- Giving a lift in your car to a neighbour every morning to town.
- Hosting a party for friends at home.
- Buying a drink to a person sitting next to you in bar
Domestic arrangements are generally presumed at law as not legally binding (unless the agreement demonstrates that there was an intention to be bound). The case of Balfour v Balfour [1919].
Capacity to Contract
Generally, under English law, and law in most other countries, the age of majority is 18 years.
Capacity to contract by a person of full age, 18 years, is well established by the Family Law Reform Act 1969. There are some countries whose age of majority is at 16 years. Anybody who has reached age 18 at the time of entering into a contract has legal capacity to contract.
Capacity to contract by any person of full age?
- Mentally disordered persons may not have capacity to contract. Anybody entering into contract with such persons risks their contract being unenforceable. Such people do not always have a stable mind to make independent decisions.
- Drunken persons may have not capacity to enter an enforceable contract. Their minds are not usually stable to take independent decisions.
- Minors: Minors are persons who have not yet reached the age of majority according to the law. According to the Family Law Reform Act 1969, such persons are under the age 18 years. Such persons become adults at the beginning of their 18th birthday (at exactly one-minute past midnight). Anybody who enters a contract with a minor risk having an unenforceable contract. Generally, most contracts with a minor are voidable at the minor’s option.
Legal implication on contracts with minors
Contract for necessaries
- Contracts made with minors for the purchase of necessaries are binding on the minor.
- A necessary must be a necessary good that particular minor and the minor must not already have an adequate supply. The minor needs necessaries for immediate needs including food, drink (not alcohol), accommodation, clothing, and medicines, among others.
Voluntary Consent & Factors That Vitiate A Contract
When we vitiate a contract, we render it defective. We can look at duress, undue influence, mistake, and misrepresentation.
Misrepresentation
