16 Pages Posted: 17 Jul 2008 Last revised: 20 Oct 2016
Date Written: July 17, 2008
There are six essential requirements of a contract. The first is the free consent of parties to a contract secondly, the competence of parties of the contract. Thirdly, a lawful object, fourthly, a lawful consideration, fifthly, not declared void by law and lastly, the intention to create legal obligations.
The intention to create legal obligations or the problem of intention is however held doubtful as to whether it is a necessary ingredient or not. The obvious reason for this is that it is very rarely an issue and that the intention to create legal relations goes without saying in the vast majority of contracts. However, it is now established that an agreement does not constitute a binding contract unless it is one which can reasonably be regarded as having been made in contemplation of legal consequences. A mere statement of intention made in the course of conversation will not constitute a binding promise, though acted upon by the party to whom it was made . According legal historian Prof. AW Brian Simpson "the doctrine of intention to create legal obligations might date back to the 19th century in the landmark Carlill vs. Carbolic Smoke Ball Company" but it was not formally recognized till the landmark decision of Balfour v. Balfour in 1919.
The researcher's aim through the course of the research is to find the nature of the problem of intention in general while drawing the line of distinction between the nature of the problem in terms of commercial and non commercial (social and domestic) agreements.
Keywords: Law of Contact, Legal Intention, Balfour, Merrit
JEL Classification: K12
Suggested Citation: Suggested Citation