Consideration and Intention to Create Legal Relation Essay

Consideration and Intention to Create Legal Relation - Essay Example This is a case of acceptance by conduct. Acceptance need not necessarily be in writing. In the case of Carlill v Carbolic Smoke Ball1, Miss Carlill demonstrated her acceptance of the offer by purchasing the smoke ball Another issue for determination is whether there was the intention by the parties to create a legally binding relationship. We will access the issue of promissory estoppels to access the existence of legal relationship between the parties. In England and Wales, Lord Denning interpreted promissory estoppels to be a promise that had been made by one party to another with the intention of creating legal relations2. The promise should be made with knowledge that it is going to be relied on by the other party. In the instance case, the bank approached Bubba with a promise to change the terms in the contract on how the loan was to be repaid following Bubba’s financial crisis. This promise was relied on by Bubba. The bank will therefore not be allowed to go back from it s promise. This is primarily owing to the fact that it had been acted upon by the recipient. After realizing that Bubba’s fortune had turned, the proposal to Bubba to revert to the old system of payment constituted an offer to Bubba which he was entitled to accept or reject. The bank now demands that Bubba should pay the lump sum for eight months as well as repay the loan within a period of three years as per the earlier agreement. The earlier agreement had been revoked upon the establishment of new terms by the bank that was accepted by Bubba. The facts in the high trees case, involved a situation at the beginning of Second World War where High Trees House had leased some flat in London from Central property. As a result of the war, occupancy rates drastically went down. The parties therefore made an agreement to cut down the rent that was payable by half. When the situation turned around after the war, Central London property sued for the full rent. The court held that they were entitled to full payment of rent. However, they could not recover the amount that they had agreed to cut down the rent by during the period of war Lord Denning based his decision in the previous case3 which held that if a party to a contract leads another person to believe that they will not enforce their legal rights, they cannot go back from this promise, especially if the other party had accepted the promise and altered his position in reliance on the promise. In the case of Smith v. Hughes4, the court held that for there to be a valid contract, there must be a meeting of the minds of two parties who intend to be legally bound. For there to be meeting of the minds, offeree must communicate his acceptance of the offer to the offeror. It is not necessary that acceptance should be communicated verbally. It can in some situations be inferred from the conduct of the parties. The court in the case of Brodgen v. Metropolitan Railway Company5 held that acceptance can be inferred fr om the conduct. In this case the plaintiff had been supplying the company with coals for some of years. The plaintiff thereafter came up with a suggestion that they needed to enter into a formal contract. Their respective agents met and engaged in some negotiations on the best agreement that they wanted to enter into. The company’s agent then drew up the contract which he sent to the plaintiff for approval. The court held that the company’s acceptance could be inferred from its conduct. By