SECTION - B

Q5. In commercial and business agreements, the presumption is that the parties intended to
create legal relation,” Discuss.

The presumption that the parties to commercial and business agreements intended to create legal
relations is a fundamental principle of contract law. This means that when two or more parties enter
into an agreement, the law assumes that they intended the agreement to be legally binding, unless
there is clear evidence to the contrary.

This presumption reflects the commercial nature of business agreements, where parties often
engage in transactions with the expectation that they will be legally enforceable. It is important to
note that this presumption applies equally to oral and written agreements, and to both formal and
informal arrangements.

In practice, this presumption means that if one party fails to fulfill their obligations under the
agreement, the other party may have legal recourse to seek damages or specific performance.
However, to enforce a commercial agreement, the terms must be clear, certain, and not contrary to
law or public policy.

It is worth noting that there are certain situations where the presumption of an intention to create
legal relations may be rebutted. For example, in social or domestic situations, the parties may not
intend their agreements to be legally binding. Similarly, agreements made between family members
or close friends may not be legally enforceable if the parties did not intend to create legal relations.