Commercial agreements
In commercial agreements the general presumption is that parties do intend to
create legal relations, although, again, this may be rebutted. However, it is more
difficult to rebut this presumption and very clear evidence will be needed. It is
very important in a commercial context to remember that most contracts are
formed in situations where at least one of the parties is expecting to make some
commercial gain – often money. Provided that these contracts are made in a fair
way, it is reasonable to expect that the law will support the agreements. So, if a
person orders a piece of furniture from a shop, and it is delivered, it is
reasonable that the law would make the customer liable for payment. Equally,
if the furniture shop obtains more items from a manufacturer, the owners of the
shop are, in turn, legally liable to pay the manufacturer under the terms of the
agreement with them. This supports the commercial expectations of the person
in business, but what about the consumer?
The courts took a contextual approach to rebutting the presumption in
Edmonds v Lawson (2000). A pupil barrister argued that the agreement
concerning pupillage was made in a commercial context and therefore a
binding contract. If this was so, then the presumption of legal intent would
bring the contract within employment legislation and subject to the
minimum wage. The court held that the presumption would apply, but
would be rebutted because of the context of pupillage where payment was
traditionally not made.
Honourable pledge causes
It is important that the consumer, an individual buying from a person in
business, is protected from exploitation by a commercial venture. We can
see here two sides to agreement, and the law merely aims to see that
fairness exists between them. That is generally the reason for the
presumption regarding commercial agreements. Sometimes, however, a
party may successfully rebut the presumption, although the courts will
require very clear evidence to deny legal intent.
Legal intent 71If you bought a new toothbrush which was advertised as ‘sold with a smiley
sticker’, and when you paid for the toothbrush you were told that there were
no stickers left, would you expect to be able to force the seller legally to
compensate you? What if you bought a new computer and you were
promised a free printer?