Contract law is concerned with enforcing promises that parties intend to be legally binding. Not every promise, agreement, or arrangement made between persons is meant to attract legal consequences. Many agreements are made daily in homes, among friends, and within families based on trust, affection, moral duty, or social convenience. The law does not interfere with such arrangements unless the parties clearly intended that their agreement should be enforceable in court.
The doctrine of intention to create legal relations exists to separate legally enforceable contracts from non-binding social and moral promises. Even where offer, acceptance, and consideration are present, the absence of intention to create legal relations will prevent the formation of a valid contract.
The objective test is a fundamental principle used by courts to determine whether a legally binding contract exists and to interpret the meaning of contractual terms. Under this approach, the court does not focus on what the parties privately intended in their minds. Instead, it examines how the words and conduct of the parties would appear to a reasonable person placed in the same circumstances.
The test is rooted in the need for certainty in commercial and social transactions. If courts were to rely on secret intentions or undisclosed motives, contractual relations would become unpredictable and unstable. The law therefore prioritizes outward expression over internal thought.