Enforceable contracts: intention to create legal relations

• Main Authors: Nik Malini Nik Mahdi, Nur Izzati Mohamad Anuar, Nurul Hasliza Razmin, Nur Dalila Mat Yusoff
• Format: Book Section
• Language: English
• Published: International Business Information Management Association 2013
• Online Access: http://discol.umk.edu.my/id/eprint/8525/1/paper%20115.pdf; http://discol.umk.edu.my/id/eprint/8525/

Contrary to the general view of non-lawyers and laymen; not all promises or agreements can be accepted or are enforceable at law. An agreement is enforceable if an aggrieved party whose rights have been breached by the other party to the agreement can enforce those rights or get his remedies from the courts of law. In order for a contract to be enforceable, a promise or agreement must be valid and binding between the parties; meaning that they must be capable to be legally construed as contracts that are valid and binding at law. The elements of an enforceable contract is judicially explained by VC George in the case of Kajang Sri Rock Products Sdn Bhd v Maybank Finance Bhd & Ors1 in that “To constitute a valid contract there must be separate and definite parties thereto; those parties must be in agreement, that there must be consensus ad idem, those parties must intend to create legal relations in the sense that the promise to each side are to be enforceable simply because thay are contractual promises and the promises of each party must be supported by consideration.’ This paper seeks to explain what is ‘intention to create legal relations,’ for abject failure to understand this most basic of a contractual element apart from the classic ‘offer’ and ‘acceptance’ requirements, will render a promise or agreement unenforceable at law thereby throwing many precious business relationships and business ventures into the floors of the courts with very lengthy and expensive court battles therein.