BLR  Vol.4 No.2 , June 2013
Intention to Create Legal Relations and the Reform of Contract Law: A Conservative Approach in the Modern Global Era
Author(s) Zhixiong Liao
ABSTRACT
This paper is partially to refute the submissions by Gulati’s article recently published on Beijing Law Review which proposes abandoning the requirement of proving intention to create legal relations for the formation of an enforceable contract. After a critical analysis of the abandonists’ arguments, this paper argues that intention to create legal relations is the “marrow of contractual relationships” and the arguments for abandoning such a requirement because of the existence of consideration and/or offer and acceptance as test(s) of contractual enforceability is untenable and unconvincing. Consideration and/or offer and acceptance may be evidence of serious intention to be bound somehow but unnecessary intention to be bound legally. For a number of reasons, the doctrine of consideration is very unlikely to work any better than the intention to create legal relations test. If a test of contractual enforceability must be abandoned, that should be the doctrine of consideration rather than the intention to create legal relations. This paper compares the current positions of some common law jurisdictions, upholds the needs of stability, consistency, and the harmonisation of contract law in the modern global era, and proposes a conservative approach of contract law reform regarding the intention requirement and the related presumptions, that is, all common law jurisdictions should “go back” to the orthodox English position.

Cite this paper
Z. Liao, "Intention to Create Legal Relations and the Reform of Contract Law: A Conservative Approach in the Modern Global Era," Beijing Law Review, Vol. 4 No. 2, 2013, pp. 82-93. doi: 10.4236/blr.2013.42011.
References
[1]   Atiyah, P. S. (1986). Essays on contract. Oxford: Clarendon Press.

[2]   Benson, P. (2001). The unity of contract law. In P. Benson (Eds.), The theory of contract law: New essays (pp. 118-205). Cambridge: Cambridge University Press. doi:10.1017/CBO9780511570834

[3]   Burrow, Finn, & Todd (2012). Law of contract in New Zealand (4th ed). Wellington: Lexis Nexis.

[4]   Chen-Wishart, M. (2009). Consideration and serious intention. Singapore Journal of Legal Studies, 434-456.

[5]   Cheshire, G. C., & Fifoot, C. H. S. (1969). The law of contract (2nd ed.). Sydney: Butterworths.

[6]   Chloros, A. G. (1968). The doctrine of consideration and the reform of the law of contract: A comparative analysis (a paper commissioned by the United Kingdom Law Commission). The International and Comparative Law Quarterly, 17, 137-166. doi:10.1093/iclqaj/17.1.137

[7]   Coote, B. (1995). Contract—An underview. Wellington: Legal Research Foundation.

[8]   Coote, B. (2010). Contract as assumption: Essays on a theme. Oxford: Hart Publishing.

[9]   Courmadias, N. (2006). Intention to create legal relations: The end of presumptions? Australia Business Law Review, 34, 175-185.

[10]   Fried, C. (1981). Contract as promise: A theory of contractual obligetion. Cambridge, MA: Harvard University Press.

[11]   Gulati, B. (2011). “Intention to create legal relations”: A contractual necessity or an illusory concept. Beijing Law Review, 2, 127-133. doi:10.4236/blr.2011.23013

[12]   Heffey, P., Paterson, J., & Robertson, A. (2002). Principles of contract law. NSW: Lawbook.

[13]   Hepple, B. A. (1970). Intention to create legal relations. Cambridge Law Journal, 28, 122-137. doi:10.1017/S0008197300011636

[14]   Hillman, R. (2000). The limits of behavioral decision theory in legal analysis: The case of liquidated damages. Cornell Law Review, 85, 717-738.

[15]   Keyes, M., & Burns, K. (2002). Contract and the family: Wither intention? Melbourne University Law Review, 26, 577-595.

[16]   Kimel, D. (2003). From promise to contract: Towards a liberal theory of contract. Oxford: Hart Publishing.

[17]   Klass, G. (2009). Intent to contract. Virginia Law Review, 95, 14371503.

[18]   Koo, Z. X. (2011). Envisioning the judicial abolition of the doctrine of consideration in Singapore. Singapore Academy of Law Journal, 23, 463-503.

[19]   Lucke, H. K. (1967-1970). The intention to create legal relations. Adelaide Law Review, 3, 419-430.

[20]   McKendrick, E. (2003). Contract law: Text, cases, and material. Oxford, NY: Oxford University Press.

[21]   Poople, J. (2006). Textbook on contract law (8th ed.). NY: Oxford University Press.

[22]   Posner, R. (1998). Rational choice, behavioural economics and the law. Stanford Law Review, 50, 1551-1575. doi:10.2307/1229305

[23]   Rostain, T. (2000). Education homo economicus: Cautionary notes on the new behavioural law and economics movement. Law and Society Review, 34, 973-1006. doi:10.2307/3115129

[24]   Seddon, N. C., & Ellinghaus, M. P. (1997). Cheshire and Fifoot’s law of contract (7th ed.). Sydney: Butterworths.

[25]   Smith, S. A. (2004). Contract theory. Oxford: Oxford University Press.

[26]   Smith, S. A. (2005). Atiyah’s introduction to the law of contract. Oxford: Clarendon Press.

[27]   Trebilcock, M. J., & Elliott, S. (2001). The scope and limits of legal paternalism: Altruism and coercion in family financial arrangements. In P. Benson (Ed.), The theory of contract law: New essays (pp. 45-86). Cambridge: Cambridge University Press. doi:10.1017/CBO9780511570834.003

[28]   Wightman, J. (2000). Intimate relationships, relational contract theory, and the reach of contract. Feminist Legal Studies, 8, 93-131. doi:10.1023/A:1009252419410

[29]   Williston, S. (1957). Williston on contracts (3rd ed). New York: Rochester.

 
 
Top