What presumption do the courts make in commercial agreements?

Expert Solution

According to contract act for a valid contract its must create to fulfil legal obligation.So when any commercial agreements go to court first court verify legal obligation of contract. Intention to create legal relations is an elements of contract. Intention to create legal relations is defined as an intention to enter a legally binding agreement or contract. Intention to create legal relations is one of the necessary elements in formation of a contract.

Create legal obligation has following importance in aggrement,

1.It shows seriousness of both parties offeror and acceptor-When two parties decided to enter in a contract, they should understand the contents of the contracts.So both party should be clear abot term and condition mention in aggrement,

2.An agrgrement created without creating legal obligation is not valid - Intention to create a legal relation is one of the essential elements of contract. So, if there is no intention to create a legal relation, the contract is not valid and no party can sue each other if any party refuse to perform their obligation,For example if one friend offer other friend that he will show movie to him theatre but he does not perform their obligation at the time of performance in this case contract is created without intention to create legal obligation because aggrement is social nature.

3.Without creating legal obligation aggrement is mere promise- with no intention to create legal relations, it will make any contract to become a mere promise. Mere promises arise when there is no intention to create legal relations.

Above mention presumption consider by court,Apart from that court will also see following:

1.Considerstion involve in aggrement or not.

2.Aggrement created between competent party or not,

3.Free consent involve in aggrement or not.

2.

jeff jeffy answered 1 year ago

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What presumption do the courts make in commercial agreements?

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