Home | Cases | Rose and Frank & Co v Crompton

 

Key information

Court
Court of Appeal, England

Issues
Intention to create legal relations
Honour clause

AustraliaRose and Frank & Co v Crompton

[1923] 2 KB 261

 

Facts

Rose and Frank (plaintiffs) entered into an agreement with the appellants in relation to the supply of tissue paper. The document recording this agreement said

“This arrangement is not entered into, nor is this memorandum written, as a formal or legal agreement, and shall not be subject to legal jurisdiction in the Law Courts … but it is only a … record of the purpose and intention of the … parties … to which they each honourably pledge themselves … based on past business …

Disputes arose and the issue of whether there was contractual intent was raised.

Held (Atkin LJ)

The agreement expressed in clear terms that the parties did not intend to enter into legal relations – there was nothing ‘absurd’ about this and therefore there was no binding contract because there was no requisite intent.

[Bankes and Scrutten LJJ reached the same conclusion]

 

Note: in Australia presumptions should no longer be used: see Ermogenous

 

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