Explain why it is important to have the intention to create legal relationships when entering into a contract and why consideration of the parties to the agreement is necessary: ​​The intention to create legal relationships can be defined as follows. «An agreement will only become a legally binding contract if the parties intend it that way. This will be strongly presumed in the case of commercial agreements, but will be presumed otherwise if the agreement is of a friendly, social or domestic character.' Source (HNC Business Law Unit 5 Textbook) In determining whether the parties intend their agreements to be legally binding, the court relies on two presumptions. The parties to a domestic or social agreement are not intended to be legally binding. The parties to a business agreement intend it to be legally binding. These are only presumptions and can be refuted with sufficient evidence to the contrary. Domestic and Social Arrangements Balfour v Balfour (1919) Merritt v Merritt (1976) Simpkins v Pays (1955) Commercial Arrangements Jones v Vemons Pools (1938) Source (HNC Commercial Law Notes) One of the essential elements in creating a binding contract, this intention is implicit in the fact that it is not expressly denied. If expressly denied (as in the so-called gentlemen's agreement) the contract may not be enforceable. Consideration {text:bookmark-start} {text:bookmark-end} If you look at a legal agreement or contract, you will generally see a sentence in the opening paragraph that indicates that the parties agree to a sum of money or “other property and valuable consideration. " The concept of consideration has a long history in law, but it simply means something of value. An exchange of considerations between the parties to an agreement is necessary to... middle of paper ...people are vulnerable due to addiction and deserve the protection of the State against the risks of abuse or exploitation. Therefore, all agreements made are voidable and a court can declare that person a ward of the State and grant power of attorney to an appointed legal guardian (in England and Wales, this is a specific function of the Court of Protection) source (www.Wikipedia.com ) Drunkenness/drug abuse Section 3 of the Sale of Goods Act 1979 provides that they must pay a reasonable price for essential goods in the same way as minors. Other types of contracts are governed by common law. If a person is drunk at the time of the conclusion of the contract, he will be able to avoid his responsibilities if he can prove that he did not understand what the agreement was about and that the other person was aware of it. Source (Commercial Law Denis Keenan and Sarah Riches)