intention to create legal relations

intention to create legal relations
before parties can be said to have entered into a legal contract as opposed to an agreement, they must have intended to effect a legal obligation. This can be inferred from the circumstances, and an intention to effect legal relations is readily assumed in business.
One of the purposes of the rule is to exclude social arrangements and to leave people free not to contract. One of the academic debates is the problem of whether a person who contracts as a joke or who contracts intending to default, intends to effect a legal obligation. In the USA it has been suggested that it is sufficient if the promises involved are seriously intended. In English law it is important to examine this requirement along with consideration.

Collins dictionary of law. . 2001.

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