Two companies sign a detailed supply agreement. In which situation is the presumption that they intended to create legal relations most likely to be rebutted?

Correct answer: C) The agreement states clearly that it is binding in honour only and not intended to be legally enforceable

Explanation

In commercial agreements the law presumes an intention to create legal relations, but clear express words can rebut this. An 'honour clause' is the classic example (Rose and Frank v Crompton). How the agreement was negotiated, how big the parties are, and whether the price is below market value do not rebut the presumption.