Evaluate this statement in light of relevant case law and doctrine of Essay

Evaluate this statement in light of relevant case law and doctrine of promissory estoppel - Essay Example Thus, whenever it is established that there was an intention to create a legal contract, the parties involved in the creation of the intention are prevented from rescinding the contract, through the doctrine of estoppels2. The substance of a contract is the intention that the individuals had when they were establishing the contractual agreement. Therefore under the law, an agreement is only legally enforceable, if the parties are deemed by the court to have intended to establish it1. While the element of consideration is essential for a legal establishment of a contract, the intention to establish such a contract overrides the substance of consideration, since where the court can determine that the parties involved in the establishment of a contractual agreement had the intention to do so, and then the presumed consideration is as good as agreed. While the intention to create a legal relation between parties may not have been stated explicitly, it is the circumstances and the conditi ons surrounding the establishment of the agreement that are inferred, to establish whether such an intention existed2. To establish the existence of an intention to create legal relations, two principles always come into play. First, the principle of the reasonable man test, must apply. This principle seeks to determine whether, given the circumstances under which the parties to an agreement were while establishing it, a reasonable man can find there was or there was no intention to create a legally binding agreement3. The second principle is the principle of two presumptions, which presumes differently when considering the intentions of an agreement, depending on whether the agreement is a commercial agreement or a social agreement. Nevertheless, the differentiation in the nature of the agreement, when it comes to the presumption of an intention to create a legally binding contract, has a predetermined position. The conditions applicable for a commercial agreement in relation to th e principle of intention to create a legal contract are different when it comes to social and domestic agreements4. The predetermined position for a business transaction or any commercial agreement is that there is always an intention to create a legal relation. On the other hand, the predetermined position for the domestic and social contract is that there is no intention to create legal relations, unless proved otherwise. Therefore, for a business transaction, the person wishing to rescind the contract has to prove to the courts that the circumstances and conditions under which the agreement was entered into, do not qualify to establish a legal and binding obligation. On the other hand, for a social or domestic agreement, the parties involved must prove to the courts that there was indeed a need to establish a legally binding contract between the parties (Mulcahy and Tillotson 97). This presumption was demonstrated in the case of Balfour v Balfour [19193] 2 KB 571, where Mr. Balfo ur lived in a different estate with Mrs. Balfour, who could not join him due to her medical condition. Therefore, Mr. Balfour promised to be remitting $30 to his wife every month, but later default on the remittance. Consequently, Mrs. Balfour sought to enforce the agreement through a court of law, on the premise that there was a legally binding