LAW 122 Lecture Notes - Lecture 7: Contract, Posting Rule, Collet
15 Oct 2017
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Chapter seven: the nature and creation of contracts. Contracted relationship can continue even after there has been an exchange of value. Intention to create legal relations arises if a reasonable person would believe that the parties intended to create a legally enforceable agreement. *** contracts don"t have to be written in order to be enforceable. Court will ask whether a (cid:498)reasonable(cid:499) person would have believed that the parties intended to enter into a contract. An intention to create legal relations exists in a commercial context, not between friends or family members these presumptions. Personal guarantees ex. allows the bank to collet from the director of the company if the company did not repay the loan. A test of subjective intentions would be difficult to apply because a person could easily lie at rial. The law of contracts aims to protect reasonable expectations. A reasonable person simply ignores unrealistic and exaggerated proposals.
