ADELEKE UNIVERSITY

Loogun-Ogberin Road, Ede Osun State

FACULTY OF LAW

NAME: OLOKE KEHINDE ALEXANDER

MATRICNO: 20/0166

LEVEL: 200

ASSIGNMENT

Course Code: PULL 201

Course Name: LAW OF CONTRACT

SUBMITTED TO:BARRISTER ADEWALE

QUESTION: “What do you understand by the concept “PRESUMPTION” in

Contract and its relevancies? Let your view be supported by relevant legal

authorities
Presumption

Since contract is defined as a legally binding agreement between two parties

or more, once an offer is given and accepted, with consideration in
attendance, the element that convert agreement into a true/valid contract is
called PRESUMPTION.

Presumption is therefore a doctrine that establishes whether a court should

presume that parties to an agreement wish it to be enforceable at law, it
states that an agreement is legally enforceable only if the parties are
deemed to have intended it to be a binding contract. in an agreement,
there must be evidence that the partners in an intended agreement is
subjected to legally enforceable process, because it is only the
establishment of intention to create a legally binding and enforceable
relationship that can give a rise to legal obligation where any party in breach
is liable under the law.

Professor ItsaySagay opined that ……..” for an agreement to constitute a

contract, the following five ingredient must present, offer, Acceptance,
consideration,Intention to enter into a legal relation and capacity contract,
In Orient Bank (Nig.) Plc. V. Bilante International Ltd.1997} NWLR(pt.515)37
at 76,

Presumption can be rebuttable, when a burden of proof is involved, when

there is contrary evidence the civil standard of proof is a “A balance of
probabilities”while the criminal standard of proof is “Beyond reasonable
doubt “:in commercial contracts, there is a rebuttable presumption that there
is legal intent. It is for the party claiming there is no legally binding contract to prove
this. Where there is a dispute, the court will look at the objective conduct of the

parties together with the relevant circumstances. Here different presumptions

will apply, the following 4 categories are into serious consideration

1.FAMILY AGREEMENT:has a presumption of no contract, except in some

serious exceptional cases and proof, In 1919, Lord Atkin held in Balfour V.
Balfour(1919)2 KB 571 (where husband promised his wife to pay
maintenance while he worked in Ceylon) that there was no intention to be
legally bound” though the wife is relying upon the payment , The judge
stated that as a general rule, agreements between spouses would not be
legally enforceable.

In Jones V. Padavatton(1968) EWCA WLR 1 ALL ER 616, the court applied

Balfour V. Balfour and declared that a mothers promise to allow her
daughter an allowance plus the use of house provided she left the USA to
study for the English Bar was not an enforceable contract.

However, if there is a clear intent to be contractually bound, the

presumption is rebutted.
2. SOCIAL AGREEMENT falls to presumptions of no agreement, agreement and
promises between friends, has no presumption substance, cases in this category
are decided on its merit using objective test. But highly rebuttable where cases of
mutuality and premises of intention for a contract could be established. In the
Simpkins v Pays [1955] 1 WLR in 1955, this case involved an
informal syndicate agreement between a grandmother, grand-daughter and a
lodger. The three ladies regularly entered a fashion competition in the "Sunday
Empire News" where 8 types of fashion attire were ranked. For a period of 7 to 8
weeks, the plaintiff lodger, the defendant grandmother, and the grand-daughter
each contributed one forecast on the coupon.

The coupon in question was filled in by the lodger, but was made out in the
grandmother's name. The costs of postage and the 30 shilling entry fee were
informally shared, being sometimes paid by one and sometimes by another.
When the question of sharing winnings first came to be considered between the
lodger and grandmother, the latter said that they would "go shares".

The coupon sent in for June 1954 was successful; but the grandmother refused to
pay a third of the £750 prize money to the lodger, claiming that the arrangement
to share any winnings was reached in a family association and was not intended
to give rise to legal consequences, and that accordingly, there was no contract.

'Sellers J said that the grandmother was required to give one-third of the
winnings to the lodger. The judge, applying the objective test, said that the
informal agreement between the parties was binding and that the facts showed a
"mutuality" between the parties
“If my conclusion that there was an arrangement to share any prize money is not
correct, the alternative position to that of these three persons competing
together as a "syndicate", as counsel for the plaintiff put it, would mean that the
plaintiff, despite her propensity for having a gamble, suddenly abandoned all her
interest in the competition in the Sunday Empire News. I think that that is most
improbable....

3. COMMERCIAL AGREEMENT: has a presumption of a valid contract;

by all indications has enforceable legal obligations between the parties, Business
transactions incur a strong presumption of a valid contract: these agreements
where the parties deal as though they were strangers, are presumed to be
binding , in general rule, all commercial agreement are legally binding and
presumption to enter into a legal transactions is established., However, there are
situations where offending clauses may be inserted into commercial agreements,
such words like, This agreement shall not entertain any court jurisdiction,

The party asserting an absence of legal relations must prove it; and any terms
seeking to rebut the presumption must be clear and unambiguous, When the words
"and shall not be subject to legal jurisdiction in the Law Courts either of the

United States or England," are "blue-pencilled out", the remainder becomes

legally acceptable, while staying true to the intended meaning. In
Edwards v Skyways Ltd [1964] 1 WLR, A bonus payment, described as 'ex gratia',
was promised to an employee, this was found to be legally binding. He had relied
upon the promise in accepting a redundancy package, and his employer could not
adequately prove that they had not intended their promise to become a
Collective bargaining results in a collective bargaining agreement (CBA),
a legally binding agreement that lays out policies agreed to by management
and labor. Because of its role in governing the actions of both management
and labor, a CBA is often referred to as the “law” of the workplace. Collective
bargaining results in a collective bargaining agreement (CBA), a legally
binding agreement that lays out policies agreed to by management and
labor. Because of its role in governing the actions of both management and
labor, a CBA is often referred to as the “law” of the workplace.contractual term

4. COLLECTIVE AGREEMENTis a special type of commercial

agreement such as one negotiated by collective bargaining, such as Trade
Unions and Managements except where a contract clause in writing declared
otherwise, end of a term of minister may discontinue agreements made earlier
under another government appointee, Collective bargaining results in
a collective bargaining agreement (CBA), a legally binding agreement that lays
out policies agreed to by management and labor. Because of its role in governing
the actions of both management and labor, a CBA is often referred to as the “law”
of the workplace. It is valid contract and enforceable in law courts