BTB1010 Chap.3 Intention, Consideration and Reliance
Intention, Consideration and Reliance
Intention to create legal relations asks whether words, conduct and context objectively show an agreement meant to have legal consequences. Commercial and social settings can support different inferences, but labels are not conclusive and modern analysis attends to the full context. Consideration asks for bargained-for value moving from the promisee.
It may be an act, promise or forbearance, and it need not equal the economic value of the return promise. It must nevertheless be legally sufficient, connected to the bargain and not merely completed before the promise was made. Performance of an existing duty requires careful attention to whether new value or a practical benefit is recognised in the circumstances.
Reliance-based doctrines address a different problem and should not be used as a vague substitute whenever consideration is difficult. A precise answer states which promise is being enforced, what value or reliance supports it, how the parties framed the relationship and what remedy or limit follows.
What this chapter covers
- 01
Intention to create legal relations
- 02
Sufficient consideration
- 03
Promissory estoppel
- 04
Objective intention
- 05
Commercial, social and domestic context
- 06
Bargain and exchange
- 07
Sufficiency versus adequacy
- 08
Past consideration
- 09
Existing duties and practical benefit
- 10
Reliance and promissory estoppel
Identify the consideration for a variation
- 1State the original duty and the new promise said to support the variation.
- 1Ask whether the supplier undertakes anything beyond the existing contractual obligation.
- 1Consider any recognised practical benefit and the conditions limiting that reasoning.
- 1Check pressure, reliance and the precise remedy before concluding on enforceability.
Key terms
- Intention to create legal relations
- The objective requirement that an agreement be meant to carry legal consequences.
- Sufficient consideration
- Value recognised by law, distinct from a judicial assessment that the exchange is economically equal.
- Promissory estoppel
- A reliance-based doctrine that can constrain departure from an induced assumption in defined circumstances.
Intention, Consideration and Reliance FAQ
Whose performance supplies the consideration?
No. It supports an inference, but wording, relationship, seriousness and surrounding conduct can rebut or strengthen that inference. Apply the objective test to the whole setting.
Why is adequacy different from sufficiency?
Courts generally do not require equal economic value, but the alleged consideration must still count as legal value and be part of the bargain. The distinction preserves bargain analysis without policing exchange equivalence.
Can an act completed earlier be consideration?
Ordinarily a past act is not exchanged for the later promise. Analyse whether the act was requested on an understanding of payment or another recognised exception applies.
Whose act or promise counts as consideration?
The promisee seeking enforcement must provide or arrange value under the applicable rules. Identify parties and promises rather than referring to consideration in the abstract.
Does performing an existing duty always fail?
Not invariably. Added performance, a duty owed to another person or a recognised practical benefit may matter, subject to doctrine and safeguards such as absence of improper pressure.
Is reliance the same as consideration?
No. Consideration focuses on bargain; reliance doctrines have their own elements, limits and remedies. Do not use reliance as an unstructured fairness label. Identify the precise assurance and changed position before selecting relief.
How should social agreements be analysed?
Consider wording, seriousness, reliance, financial arrangements and relationship context. Avoid assuming that a family label automatically prevents legal intention. The conclusion should address the strongest contrary indicator as well.
What should a conclusion identify?
Name the promise, the enforcing party, the factual basis for intention or value, the strongest objection and the scope of any likely enforcement or reliance response.
Exam move
Create a promise map with one arrow for each promise and another for each alleged item of value. If the arrows do not form the asserted exchange, reconsider the consideration analysis. For intention, compare the outward evidence supporting legal seriousness with evidence of informality. Keep reliance on a separate checklist.
Practise explaining why a fact belongs to one doctrine rather than using every sympathetic fact everywhere. Use three separate ledgers for seriousness, bargain and changed position. The intention ledger records wording, formality, relationship, financial stakes, performance and any express exclusion of legal force.
The consideration ledger pairs each promise with the act or counter-promise allegedly sought in exchange, then tests timing, existing duty and movement from the enforcing party. The reliance ledger states the induced assumption, the promisor's role, the claimant's consequent action or forbearance, detriment and relief connected to that change.
Apply all three ledgers to one scenario and circle facts that matter differently in each doctrine. Write a short counterargument based on the strongest contrary inference rather than a relationship label or fairness instinct.
Finish by specifying which evidence—messages, payment records, expenditure dates or witness accounts—would resolve the controlling uncertainty and how the recommended remedy follows from the successful doctrinal route.
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BTF1010 Commercial Law · LAW2102 Contract Law · LAW5000 Principles of Law
