Balfour and Intention to Create Legal Relations

On page 192, the the third full paragraph, Atkin states that agreements that two spouses make between themselves are mutual promises and there IS consideration; “nevertheless they are not contracts, and they are not contracts because the parties did not intend that they should be attended by legal consequences”. This is problematic for me, because it was my understanding that one’s subjective intention was irrelevant – that if objectively, a reasonable person would believe there was intention, then it is a contract.

Exactly.  Just because a court says something doesn’t make it true.

You stimulated me to do a Weslaw search for “contract and ‘intention to create legal relation.”  It produced only two cases.

Torah Soft Ltd. v. Drosnin
224 F.Supp.2d 704

in which the court applied Israeli law, in which a subjective intention to create legal relation is required.  This court may be correct about Israeli law, because in civil law intention ( actual “will”) is much more important than in our common law and in civil law subective interpretation is preferred.

Gray v. Toledo, St. L. & W.R. Co.
143 Mo.App. 251, 128 S.W. 227
Mo.App. 1910.
which states that “An offer must be sufficiently definite and certain to show an intention to create legal relations .”  This is an old case and is not consistent with Balfour for the first part of your quotation shows that the offer was sufficiently certain.  This case is consistent with modern law only to the extent of  requiring that an offer must be sufficiently definite and certain, but the modern test of whether an offer is sufficiently certain is whether there is the basis for the objective intermreptation of an intent to be bound and whether the court can fashion a remedy (R2 33).

See also note 2, p. 193-4


Distinguishing a Contract from a Gift with a Condition

I was confused by the discussion on Wednesday.  How are we to tell whether it’s a bargain or a gift w/o asking whether the promisor is receiving some sort of benefit that he really wants or asking about the promisor’s motive?

—(RER) This is confusing.  The question that must be answered is whether the parties treat the consideration as that which is being exchanged.  And this is to be answered without relying on motive or inducement or benefit. R2 79,81.   How can it be answered?  Supposedly, from the formal structure of the  transaction.  You assert that the consideration is that which is being exchanged and hope that the judge shares your background assumptions as to how parties bargain (i.e., ideas about motives and benefits).

If forbearance alone is enough, it seems that anytime someone acts in reliance on the promise, there is an enforceable contract.  So the whole doctrine of consideration would be pointless.  I’m very confused…

–(RER) Promissory estoppel is an alternative to consideration.  If you enforce promises because the promisor foresaw reliance and there was reliance, then you are right – the whole doctrine of consideration is not necessary.  Action in reliance does not create a contract with consideration: in reliance of a promise of a gift, I do or not do something.  This is still the promise of a gift, as what I do (or not do) is not given in exchange for the gift.  Now, comes an alternative argument.  If  I knew how you were going to rely when I make a promise of a gift, then promissory estoppel comes to make this promise of a gift enforceable.  But, this does not make all promises of gifts enforceable.  I promise you a car when you finish the first year of law school.  In reliance on my promise, you don’t take a great deal on a car being offered to you by a fellow student.  If when I made the promise, I had no reason to know of this great deal, then my promise is not enforceable because of promissory estoppel.

–(RER) Does this help?  I’m glad you asked these questions and hope that more students will blog.

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