Edwards v Skyways [1964] 1 WLR 349

Material Facts:

The defendants, Skyways, was about to lay-off some pilots and agreed with the British Airline Pilots Association to pay each pilot an ex-gratia. Edward, a pilot at Skyways, wanted to leave Skyways and requested for his ex-gratia. Skyways in turn claimed that their agreement to pay ex-gratia was not done with the intention to create legal relations, and was merely a moral agreement.

Issue:

1. Whether or not the agreement between Skyways and British Airline Pilots Association was made with an intention to create legal relations.

Holding:

1. That the agreement between Skyways and British Airline Pilots Association was made with an intention to create legal relations.

Ratio Decidendi:

The court ruled that the context in which the agreement was made was a commercial context and not a domestic context. Therefore, there was a presumption that all agreements are made with the intention of creating legal relations and that the onus is on the party rebutting the presumption to prove that the agreement was not made with the intention of creating legal relations