ABSTRACT
This chapter explores the element necessary for the formation of a contract, in addition to agreement, which is an intention to create legal relations. Intention to be bound is not the same thing as 'willingness to be bound', which is the element in the offer that distinguishes it from an invitation to treat. In Coward v Motor Insurer's Bureau, an agreement to share the cost of petrol used on a journey was held not to give rise to a legal relationship. When an agreement can be categorised as a commercial agreement, then it is presumed that the parties intended to create legal relations, and the onus of proof on a party who alleges that no legal effect was intended is a heavy one. The Court of Appeal stated that their decision was not based on lack of intention to create legal relations, but on the fact that the particular words used only implied present intention, not an ongoing promise.
