Contract Law Case Study: Analyzing Domestic Agreements Enforceability

This case study examines the enforceability of a domestic agreement between Kathy and Anthony, focusing on their written agreement regarding child-related expenses post-separation. The analysis centers on whether the agreement constitutes a legally binding contract, considering the principle that domestic agreements typically lack the intention to create legal relations unless proven otherwise. Referencing key cases like Jones v Padavatton and Merritt v Merritt, the study concludes that the documented and signed contract, made after separation, demonstrates a clear intention to establish a legal relationship, thus rendering the agreement valid and legally enforceable. Desklib provides access to similar solved assignments and past papers for students.

CONTRACT ACT
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Contract Act
Facts
An agreement has been formed between Kathy and Anthony with regards to bearing expenses
related to their children. This is formed when they have separated and has assumed written
form. The key issue is to determine the contract between Kathy and Anthony would be
enforceable or not considering that it was a domestic agreement.
Relevant Law
One of the key requirements to enact a legally binding contract is the intention to enter into
legal relationship by the contracting parties. While this is assumed to be present in case of
commercial transactions, but it is not the case with regards to domestic agreements. Domestic
agreements are those agreements which are made between relatives and friends. As
highlighted in the Jones v Padavatton [1969] 1 WLR 328, in case of domestic agreements,
the court assumes that intention to create legal relations is not present unless there is a
evidence present to indicate the opposite (Davenport & Parker, 2014). In case such evidence
is not present, then these agreements are considered to be void. However, it is incorrect to
assume that all domestic agreements are void as in cases where the parties take actions such
as documentation, the contracts are binding as indicated in Merritt v Merritt [1970] EWCA
Civ 6 case (Gibson & Fraser, 2014).
Application
Considering that the agreement is between husband and wife, it would be considered as
domestic agreement. However, it is evident that there is intention on the part of both parities
(i.e. Kathy and Anthony) to enter into legal relationship. This is apparent because of
documenting a written contract with signatures. Also, at the time of contract enactment, both
of them have separated which further supports the intention to forge legal contractual
relationship. As a result, the given agreement is a valid contract.
Conclusion
Since there is evidence to prove that intention to enter into legal relation is present, hence the
given contract between Kathy and Anthony is valid and legally binding.

Contract Act
References
Davenport, S. & Parker, D. (2014). Business and Law in Australia (2nded.).
Sydney:LexisNexis Publications.
Gibson, A. & Fraser, D. (2014).Business Law (8thed.). Sydney: Pearson Publications.