The requirement of intention to create legal relations in contract law is aimed at sifting out cases which are not really appropriate for court action. Not every agreement leads to a binding contract which can be enforced through the courts. For example you may have an agreement to meet a friend at a pub. You may have a moral duty to honour that agreement but not a legal duty to do so. This is because in general the parties to such agreements do not intend to be legally bound and the law seeks to mirror the party's wishes. In order to determine which agreements are legally binding and have an intention to create legal relations, the law draws a distinction between social and domestic agreements and agreements made in a commercial context.
Intention to create legal relations in social and domestic agreements
In social and domestic agreements the law raises a presumption that the parties do not intend to create legal relations:
Intention to create legal relations in commercial agreements
Where an agreement is made in a commercial context, the law raises a presumption that the parties do intend to create legal relations by the agreement:
