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Contract law

Illustration 15 – Intention to create
legal relations

MERRITT v MERRITT 1970

Facts:

A husband who was separated from his wife promised to transfer the house into
her name if she paid off the outstanding mortgage debt. The wife paid off the
debt but the husband refused to transfer the house.

Held:

In this case, the husband’s promise was enforceable, the agreement having been
made when the parties were not living together amicably.

Commercial agreements

It is presumed that there is an intention to enter into legal relations in a commercial
agreement.

Again, it is possible to rebut this presumption if a contrary intention is clearly
expressed in the agreement itself, but the courts are very reluctant to do so.

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