'Intention to Create Legal Relations': A Contractual Necessity or An Illusory Concept

Abstract

'Intention to create legal relations' forms the basic ingredient of any valid contract in many jurisdictions around the world. The paper argues that such requirement is neither required nor is purposeful if any particular jurisdiction has 'Consideration' as the basic requirement to prove the formation of validly formed contract. The paper postulates that 'consideration' in itself is, and should ideally be, indicative of such intention. Therefore, as far as common law countries are concerned, 'consideration' in itself should be capable of dealing with the intention of the parties and there should not be any separate requirement of proving an 'intention to create legal relation'. By natural corollary, the requirement to prove such 'intention' can be justified in countries where 'consideration' is not a requirement for a form- ing a valid and legally enforceable contract. The paper, while dealing with the proposed postulations, also deals with the difference in presumption with regard to such intention while dealing with contractual relations that arise in do- mestic set-up as differing from those arising in a commercial set-up

Untitled

“…The requirement of "the intention to create legal relations" is one of the most important terms of a valid contract in the common law countries. English law specifically requires the existence of the "intention to create legally binding contract" for enforcing a contract, despite the existence of "consideration" for the contract (Gulati, 2011).…”