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Contract law cases

 Contract law cases

case laws on:Intention to create legal relationship

It means both the parties should have the same mindset of forming a legal agreement between them.


Caselaw Balfour v. Balfour

Facts of the case- Mr. and Mrs Balfour are husband and wife and came into an agreement. They used to live in US together and after a period of time Mr.balfour had to shift to Sri Lanka Alone but promised Mrs Balfour that he would be sending £30 every month and does also continue to send it but discontinued after few months.

So, the wife approached the court for the same and said that the agreement is legal and enforceable that was communicated between them but the court held that arrangement between husband and wife are not contracts because the parties do not intend to be legally bound by the agreements.

In this case there was no intention to create legal agreement between husband and wife as they were just making arrangements between themselves.


In the case of, Rose and Frank co. v. Crompton and brother Ltd 

Both the parties came to an agreement but pre-decided that the agreement is not on a legal basis but for mutual understanding basis.

And also a clause was added in the agreement stating that this won’t be enforceable in the court.

In this case the intention of the parties can be observed that they had no intention of binding into an legal agreement. So,intention to create legal relationship is seen by the conduct of both the parties.


Communication of offer

Lalman Shukla v. Gauri dutt

Gouri Dutt lost his grand son and thus offered to the public that whom so ever finds his grandson and bring back to him would be given Rs.500 as a reward

The servant of Mr.dutt found his grandson but was unaware of the offer. The plaintive came to know about the offer after he brought back the grandchild home. The plaintive demanded for the reward from Mr Dutt, but Mr Dutt denied to pay the reward as he said there was no contract as such between them.

The court held that plaintive is not liable to be rewarded as there was no communication of offer. An agreement only exist when there is an offer and acceptance to offer but as the plaintiff didn’t know about the offer, there was no acceptance from his side.

Boulton v. Jones

In this case, The defendant sent a written order for goods to a shop owned by brocklehurst , the written order was addressed to him by name . Brocklehurst had previously sold his shop to Bolton and was no longer owner of the shop. So ,the written order was received by the new owner And he sent all the ordered goods to Jones but didn’t mention that the order is being sent by Bolton and not brocklehurst . Bolton asked for the money for the goods delivered to the defendant but the defendant denied to pay the bill as he was in the knowledge that Brocklehurst has sent the goods and payment of the same will be managed as Brocklehurst had some dues left with Jones and it would set off . The court held that offer can be accepted only by the person to whom it is addressed and thus the defendant was not liable for the price as there was no contract.
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