Welch v Jess

976 Year 976 ( CMLXXVI) was a leap year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * January 10 – Emperor John I Tzimiskes dies at Constantinople, after re ...

NZ recent Law 185 is a reported

precedent A precedent is a principle or rule established in a previous legal case that is either binding on or persuasive for a court or other tribunal when deciding subsequent cases with similar issues or facts. Common-law legal systems place great valu ...

case in New Zealand on

intention to create legal relations Intention to create legal relations, otherwise an "intention to be legally bound", is a doctrine used in contract law, particularly English contract law and related common law jurisdictions. The doctrine establishes whether a court should presume ...

in the

law Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...

. It adopts into NZ case law the

English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national ide ...

cases of ''

Simpkins v Pays ''Simpkins v Pays'' 9551 WLR 975 is a precedent case on intention to create legal relations in the English law of contract. Decided at Chester assizes in 1955, this case involved an informal syndicate agreement between a grandmother, grand-daugh ...

'' and ''

Connell v MIB ''Coward v MIB'' was a 1963 Court of Appeal decision on intention to create legal relations, and on the liability of the Motor Insurers Bureau when a passenger in a vehicle is killed or injured through the driver's negligence. The decision was ...

''.

The case

Jess and his friend Welch entered a fishing contest on Ninety Mile Beach. They agreed to pool money for a kitty, agreeing to share any prize money later won. Jess subsequently won $6,000 but later refused to share the prize money, claiming that it was merely a social agreement not intended to be enforced the parties. *The court ruled that there was a legally binding contract, and Jess was ordered to share the prize money. The court declared that although social agreements are generally not legally enforceable, they can be legally enforceable under certain circumstances. In this case, the objective bystander would have thought that, having pooled the entrance fee, it was obvious that any winnings were intended to be shared.

Commentary

For an agreement to become a contract, there must be intention to create legal relations. Two judicial devices aid a court to decide whether there is intent: * the objective test, & * the rebuttable presumption. The objective test was established in

Carlill v Carbolic Smoke Ball Co ''Carlill v Carbolic Smoke Ball Company'' 892EWCA Civ 1is an English contract law decision by the English Court of Appeal">Court of Appeal, which held an advertisement containing certain terms to get a reward constituted a binding unilateral of ...

, where it was held that any

reasonable man In law, a reasonable person, reasonable man, or the man on the Clapham omnibus, is a hypothetical person of legal fiction crafted by the courts and communicated through case law and jury instructions. Strictly according to the fiction, it is ...

who read an advertisement that said the advertiser had "deposited £1000 in the Alliance Bank to show our sincerity in the matter" would deem that there was intention to create legally relations (even though, subjectively, the advertiser was a rogue who had no intention of honouring the agreement). The rebuttable presumption varies according to the type of transaction. *In a commercial context, it is presumed that parties have intention to create legal relations. *Family agreements are presumed not to be binding, unless it is obvious that a contract was intended.''

Beswick v Beswick was a landmark English contract law case on privity of contract and specific performance. The Lords, overruling the decision of Lord Denning in the Court of Appeal, ruled that a person who was not party to a contract had no independent standin ...

968 Year 968 ( CMLXVIII) was a leap year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * Emperor Nikephoros II receives a Bulgarian embassy led by Prince Boris (th ...

AC 58 HL *Although many authors deem that "social agreements" are the same as family agreements, ''Simpkins v Pays'' and ''

'' show that this is NOT the case; in agreements between friends there is effectively no presumption, and the objective test is paramount.

References

{{reflist 1976 in New Zealand law New Zealand contract case law 1976 in case law