Question 1

In which of the following cases did the court decide that dealings with the government do not give rise to an intention to create legal relations?

Accepted Answer

A)  Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502. 
B)  Ermogenous v Greek Orthodox Community of South Australia Incorporated (2001) 209 CLR 95. 
C)  Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424; [1954] HCA 20. 
D)  None of the above. 
A)  Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502. 
B)  Ermogenous v Greek Orthodox Community of South Australia Incorporated (2001) 209 CLR 95. 
C)  Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424; [1954] HCA 20. 
D)  None of the above. D

Question 2

Why was a promise to make an ex gratia payment held to be contractually binding in the case of Edwards v Skyways Ltd [1964] 1 WLR 349?

Accepted Answer

A)  The parties used clear words. 
B)  The agreement was commercial and promissory in nature. 
C)  The parties were both corporate entities. 
D)  The promise had serious consequences. 
A)  The parties used clear words. 
B)  The agreement was commercial and promissory in nature. 
C)  The parties were both corporate entities. 
D)  The promise had serious consequences. D

Question 3

In which of the following cases did the court decide that an agreement between three friends to share the prize money in a lottery was contractually binding?

Accepted Answer

A)  Teen Ranch Pty Ltd v Brown (1995) 38 AILR 5-036. 
B)  Balfour v Balfour [1919] 2 KB 571. 
C)  Merritt v Merritt [1970] 2 All ER 760. 
D)  Trevey v Grubb (1982) 44 ALR 20. 
A)  Teen Ranch Pty Ltd v Brown (1995) 38 AILR 5-036. 
B)  Balfour v Balfour [1919] 2 KB 571. 
C)  Merritt v Merritt [1970] 2 All ER 760. 
D)  Trevey v Grubb (1982) 44 ALR 20. D

Question 4

In determining whether the parties to an agreement intended to form a contract, why do the courts so often rely upon legal presumptions?

Accepted Answer

A)  Because parties frequently lie about their intention. 
B)  Because it is rare for both parties to have the same intention. 
C)  Because parties rarely express their intention. 
D)  Because that is the law. 
A)  Because parties frequently lie about their intention. 
B)  Because it is rare for both parties to have the same intention. 
C)  Because parties rarely express their intention. 
D)  Because that is the law.

Question 5

A volunteer intends to create legal relations.

Accepted Answer

A) True 
 B)False

Question 6

Advertisements are presumed not to intend legal relations.

Accepted Answer

A) True 
 B)False

Question 7

Why did the decision in Banque Brussels Lambert SA v ANI Ltd (1989) 21 NSWLR 502 differ from the decision in Kleinwort Benson Ltd v Malaysian Mining Corporation [1988] 1 WLR 799?

Accepted Answer

A)  Kleinwort Benson was an English case. 
B)  The words used in the Banque Brussels case were promissory in nature. 
C)  The Banque Brussels case involved a subsidiary. 
D)  The Kleinwort Benson case involved a subsidiary. 
A)  Kleinwort Benson was an English case. 
B)  The words used in the Banque Brussels case were promissory in nature. 
C)  The Banque Brussels case involved a subsidiary. 
D)  The Kleinwort Benson case involved a subsidiary.

Question 8

Which of the following would best describe the decision in the case of Kleinwort Benson Ltd v Malaysian Mining Corporation [1988] 1 WLR 799?

Accepted Answer

A)  The letter was a 'comfort letter.' 
B)  The letter written by the holding company was not contractually binding. 
C)  The letter was not a guarantee. 
D)  All of the above. 
A)  The letter was a 'comfort letter.' 
B)  The letter written by the holding company was not contractually binding. 
C)  The letter was not a guarantee. 
D)  All of the above.

Question 9

In Wakeling v Ripley (1951) SR (NSW) 183 the court found that a promise by a brother to his sister was legally binding because:

Accepted Answer

A)  The sister had asked him for help. 
B)  He had put it in writing. 
C)  His behaviour was unreasonable. 
D)  The promise had serious consequences. 
A)  The sister had asked him for help. 
B)  He had put it in writing. 
C)  His behaviour was unreasonable. 
D)  The promise had serious consequences.

Question 10

In which of the following cases did the court decide that an 'honour clause' in an agreement between a British firm and an American firm indicated that the firms did not intend to create legal relations?

Accepted Answer

A)  Rose and Frank Co. v Crompton and Bros Ltd [1925] AC 445. 
B)  Edwards v Skyways Ltd [1964] 1 WLR 349. 
C)  Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256. 
D)  Jones v Vernon Pools Ltd [1938] All ER 626. 
A)  Rose and Frank Co. v Crompton and Bros Ltd [1925] AC 445. 
B)  Edwards v Skyways Ltd [1964] 1 WLR 349. 
C)  Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256. 
D)  Jones v Vernon Pools Ltd [1938] All ER 626.

Question 11

What is the courts' rationale for presuming that agreements made between parties in a commercial context are intended to be legally binding? Is this a fair presumption?

Accepted Answer

The questi

Question 12

Commercial agreements are always intended to be legally binding.

Accepted Answer

A) True 
 B)False

Question 13

What is the courts' rationale for presuming that agreements made between family members are not intended to be legally binding? Is this a fair presumption?

Accepted Answer

The questi

Question 14

In the case of Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256, the court decided that the advertisement:

Accepted Answer

A)  Was only an invitation to treat. 
B)  Contained clear evidence of an intention to create legal relations. 
C)  Was presumed not to contain an intention to create legal relations. 
D)  Was nothing more than an advertising puff. 
A)  Was only an invitation to treat. 
B)  Contained clear evidence of an intention to create legal relations. 
C)  Was presumed not to contain an intention to create legal relations. 
D)  Was nothing more than an advertising puff.

Question 15

By including the wording 'this agreement is subject to contract' it is clear that the parties do not yet intend to be legally bound to a contract.

Accepted Answer

A) True 
 B)False

Question 16

What is a letter of comfort?

Accepted Answer

A letter of comfort is given by a parent

Question 17

Parties to a commercial agreement who do not wish the agreement to be legally binding:

Accepted Answer

A)  Can expressly declare that they do not intend to create legal relations. 
B)  Are unable to prevent the agreement from being legally enforceable. 
C)  Need not do anything. 
D)  Can expressly exclude the jurisdiction of the courts. 
A)  Can expressly declare that they do not intend to create legal relations. 
B)  Are unable to prevent the agreement from being legally enforceable. 
C)  Need not do anything. 
D)  Can expressly exclude the jurisdiction of the courts.

Question 18

In commercial agreements, the courts presume that the parties did intend to create legal relations.

Accepted Answer

A) True 
 B)False

Question 19

A volunteer worker may not be covered for workers compensation because:

Accepted Answer

A)  They are not an employee. 
B)  They are unlikely to work on a regular basis. 
C)  They are working under a domestic agreement. 
D)  They only work for non-profit organisations. 
A)  They are not an employee. 
B)  They are unlikely to work on a regular basis. 
C)  They are working under a domestic agreement. 
D)  They only work for non-profit organisations.

Question 20

Domestic agreements can never be binding.

Accepted Answer

A) True 
 B)False

Exam 9: Intention to Create Legal Relations

In which of the following cases did the court decide that dealings with the government do not give rise to an intention to create legal relations?

Why was a promise to make an ex gratia payment held to be contractually binding in the case of Edwards v Skyways Ltd [1964] 1 WLR 349?

In which of the following cases did the court decide that an agreement between three friends to share the prize money in a lottery was contractually binding?

In determining whether the parties to an agreement intended to form a contract, why do the courts so often rely upon legal presumptions?

A volunteer intends to create legal relations.

Advertisements are presumed not to intend legal relations.

Why did the decision in Banque Brussels Lambert SA v ANI Ltd (1989) 21 NSWLR 502 differ from the decision in Kleinwort Benson Ltd v Malaysian Mining Corporation [1988] 1 WLR 799?

Which of the following would best describe the decision in the case of Kleinwort Benson Ltd v Malaysian Mining Corporation [1988] 1 WLR 799?

In Wakeling v Ripley (1951) SR (NSW) 183 the court found that a promise by a brother to his sister was legally binding because:

In which of the following cases did the court decide that an 'honour clause' in an agreement between a British firm and an American firm indicated that the firms did not intend to create legal relations?

What is the courts' rationale for presuming that agreements made between parties in a commercial context are intended to be legally binding? Is this a fair presumption?

Commercial agreements are always intended to be legally binding.

What is the courts' rationale for presuming that agreements made between family members are not intended to be legally binding? Is this a fair presumption?

In the case of Carlill v Carbolic Smoke Ball Co. [1893] 1 QB 256, the court decided that the advertisement:

By including the wording 'this agreement is subject to contract' it is clear that the parties do not yet intend to be legally bound to a contract.

What is a letter of comfort?

Parties to a commercial agreement who do not wish the agreement to be legally binding:

In commercial agreements, the courts presume that the parties did intend to create legal relations.

A volunteer worker may not be covered for workers compensation because:

Domestic agreements can never be binding.

Legal Foundations

Origins of Australian Law

Legal Systems

How Law Is Made: Precedentstatute Law

Civil Liability: The Law of Torts and Negligence

Applications of Negligence to Business

Introduction to Contracts

Agreement Between the Parties

Consideration

Capacity of the Parties

Genuine Consent

Is the Contract Legal

Terms of the Contract

Rights and Liabilities of the Parties, Discharge and Remedies

Remedies in Contract

Statutory Consumer Guarantees and the Australian Consumer Law

General and Specific Consumer Protections Under the Acl

Agency

Introduction to Companies and Incorporated Associations

Partnerships

Choosing a Business Entity

Other Business-Related Torts

Insurance

Sale of Goods

Electronic commerce

Property and mortgages

Intellectual propert

Ethics and business practice

Criminal law in a business context

Restrictive trade practices

Negotiable instruments

Insolvency and Debt Recovery

The Work Environment and the Employment Relationship

Consumer Credit and Privacy

Ethics and Regulations in Marketing and Advertising

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