7. Intention to create legal relations

The presumption in domestic arrangements is that there is no intention to be bound. Balfour v Balfour: a husband's promise to pay his wife an allowance while he was abroad was not a contract. They were still married, and the arrangement was domestic. Jones v Padavatton is the same idea between mother and daughter over a house and studies. The presumption can be rebutted. Where the spouses are separating, or where money has changed hands in a business-like way, the court may find an intention. Merritt v Merritt is the separation case usually set beside Balfour, and the commercial contrast is Parker v Clark, where a family arrangement about a house was held binding because it was made with legal consequences in mind.

Social arrangements fall the same way. Friends who share a competition entry, as in Simpkins v Pays, can intend to be bound. A casual lift to work usually does not.

In commercial agreements the presumption is the other way. The parties are taken to intend legal relations unless the words clearly say otherwise. An "honour clause", as in Jones v Vernon Pools, can rebut it: the football pools coupon said it was binding in honour only. Appleson v Littlewood is the same sort of clause. Vague comfort letters and letters of intent need care. The question is still objective: would a reasonable person in the position of the other party have thought this was meant to be enforced in court?