Intentions to create Legal Relations

Question

What are the intentions to create Legal Relations?

Answer 1

Both parties to an agreement must intend to create a legally enforceable agreement in order for a valid contract to be formed. In answering the question of whether there was intention to create legal relations, the courts use an objective test: whether a reasonable person would believe that the parties intended to enter into a contract. The rationale for this is that a subjective test of what the parties themselves actually thought would be difficult to apply because the parties could easily lie about their intentions. As well, since the law of contract aims to protect reasonable expectations, it is appropriate that people be entitled to rely on outward appearances. Therefore, the law presumes that people entering into agreements intend their promises to be legally binding.