- when parties intend the agreement to be

DEFINITION legally binding, with legal consequences to

sue & to be sued

- appellant wrote to respondent a letter,

offering to supply glass for respondent

- the letter set out the price for the

supply of glass & the last paragraph
stated that “we hope that the above
prices are acceptable to you & shall be
grateful if you will kindly sign and return
the duplicate copy of this letter”

- respondent on the same day notified

[Kwong Kum Sun (S) Pte Ltd v Lian Soo their acceptance of the offer on the letter
Siew & Ors] itself

- whether the letter created a binding

contract or was merely an ITT?

- court held that the letter was a

contractual document

EXPRESSION IN WRITING - the letters an offer to supply glass,

which upon acceptance by the
respondent, has created a binding
agreement between parties

- there was an advertisement for sale of a

house

- a potential buyer went to view the house

- there is intention to create legal relation twice & discussions took place between
parties, but no agreement was signed
[MN Guha Majumder v RE Donough]
- to facilitate trade and commerce & to
promote certainty in business transaction - court held that when the agreement
happened in a casual conversation
- appellant (American company) and whether on the phone / otherwise, it’s
respondent (English company) entered very difficult to infer that the parties are
into an agreement for the sale of paper really entering into any legal relationship
goods in USA
- when parties made agreement with a
- the written agreement contained clause phrase ‘subject to contract’, usually not
stating that it was not a formal nor legal conclusive of the issue of whether there’s
agreement concluded contract
“SUBJECT TO CONTRACT” CLAUSE
- appellant placed orders, which were later
- agreements between spouses /
accepted by respondent
[Rose & Frank Co v JR Crompton & Bros] parents / children / close relatives /
IN BUSINESS / COMMERCIAL AGREEMENTS friends
- however, respondent terminated the
agreement & refused to send the goods & LAW436 - Intention to Create - there’s no intention to create legal
they claimed that the agreement was not
Legal Relation relations, thus transactions between close
legally binding, and hence the orders did
relatives / friends are presumed to have
not create legal obligation
no legal consequences
- court held that the terms of agreement
- a husband went to work overseas
showed that the parties has no intention
to be bound (it was a contract of honour
- his wife was sick, so she couldn’t follow & has to stay in UK
only, & was unenforceable at law)
- the husband agreed to pay $30 a month
- however, this presumption can be
& they were happily married at the time of
rebutted
the agreement (good terms)

[Balfour v Balfour] - the relationship later turned sour (bad

terms) & the husband stopped making
payments to his wife

- the wife sued the husband

- court held that there was no intention to

create legal relation & the husband and
the wife were living in amity

1. When parties were NOT in good terms.

IN SOCIAL & DOMESTIC AGREEMENTS [Merritt v Merritt]
Presumptions may NOT be invoked in
certain circumstances: 2. When parties undertake a substantial
commitment (huge + serious undertaking)

- husband & wife were separated (bad

terms)

- husband agreed that he’ll transfer the

house to his wife, but in condition that the
wife has to pay the instalments due on
the house

- these agreement were put into writing

[Merritt v Merritt] - the wife paid the instalments, but the
husband refused to transfer the house to
her

- court held that there was intention to

create legal relation & the wife can take
action for the breach of contract

- husband & wife were NOT living in amity

& their agreements were put into writing