Mataracy
VIP Contributor
Within the period of the negotiation of the contract and the exchange of offer and acceptance, the parties must exhibit a mutual intention to create a legal relationship between themselves. If this essential element is lacking there cannot be a valid legal contract.
But since it is difficult to determine the workings or intentions of the mind it is therefore not easy yo prove the existence of an intention to create legal relations. Nevertheless this difficulty have in majority of cases, been surmounted in courts by taking in to consideration the overt acts of the parties to the contract.
This is usually manifested in the substance (and perhaps form) of the contract are of a commercial or business nature, there is a strong presumption that the parties intend to create a legal obligation between themselves.
Insurance contracts fall within the ambit of a commercial or business undertaking and as such automatically satisfy the intention to enter a legal relationship between the insurer and the insured. However, this commercial or business characteristic which creates a legal intention must be distinguished from the situation where the contract is social, gratuitous or spiritual in nature. In any of these circumstances, there is no legal but a social , gratuitous or spiritual intention in the contract, indeed, the courts will not enforce a social contract based on a gratuitous or spiritual intention.
But since it is difficult to determine the workings or intentions of the mind it is therefore not easy yo prove the existence of an intention to create legal relations. Nevertheless this difficulty have in majority of cases, been surmounted in courts by taking in to consideration the overt acts of the parties to the contract.
This is usually manifested in the substance (and perhaps form) of the contract are of a commercial or business nature, there is a strong presumption that the parties intend to create a legal obligation between themselves.
Insurance contracts fall within the ambit of a commercial or business undertaking and as such automatically satisfy the intention to enter a legal relationship between the insurer and the insured. However, this commercial or business characteristic which creates a legal intention must be distinguished from the situation where the contract is social, gratuitous or spiritual in nature. In any of these circumstances, there is no legal but a social , gratuitous or spiritual intention in the contract, indeed, the courts will not enforce a social contract based on a gratuitous or spiritual intention.
