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    PracticeACCAACCA LW — Corporate and Business Law Practice Exam 1Question 06
    Easy2 marksMultiple Choice
    Corporate and Business LawSection ASyllabus BObligations

    ACCA · Question 06 · Corporate and Business Law

    In the context of intention to create legal relations, what is the legal presumption regarding commercial agreements?

    Answer options:

    A.

    There is a presumption against legal relations unless the agreement is in writing.

    B.

    There is a strong presumption that the parties intended to create legal relations, which can only be rebutted by clear evidence.

    C.

    There is no presumption; intention must be proven by the claimant in all cases.

    D.

    Commercial agreements are only binding if they contain a 'subject to contract' clause.

    How to approach this question

    Identify the standard presumption applied to business/commercial agreements.

    Full Answer

    B.There is a strong presumption that the parties intended to create legal relations, which can only be rebutted by clear evidence.✓ Correct
    In commercial contexts, the courts presume an intention to create legal relations. This can be rebutted by express words, such as an 'honour clause' (e.g., Rose & Frank Co v Crompton Bros).

    Common mistakes

    Confusing the presumption for commercial agreements with the presumption for domestic/social agreements.
    Question 05All questionsQuestion 07

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