Lecture 5 (W3): Contract: Intention to Create Legal Relations Importance of intention to create legal relations Sham transactions - don’t require legal relations – fraud (intended to legally seem like a contract) Tax benefits Equuscorp Pty Ltd v Glengallan Investments Pty Ltd Artificial transactions But court did not find a sham Did the parties have an intention for it to be legally binding Plaintiff – plead everything on the sentiment on claim Is not required to plead the positivity of the claim – the intention Relation between intention, agreement and consideration Conceptually – intention to create a legal relation Australian Woollen Mills Intention is determined objectively Intention may be express or implied. Extrinsic evidence is always admissible (if relevant), but only to determine the objective intention of the parties Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 esp. at 337D-E Parole evidence rule – oral terms are assumed to be excluded where there is written signed contract Inespro – subject to a clause that is required to satisfy