Facts
- The case involved Ms. Simpkins (a paying lodger), Ms. Pays (the homeowner), and Ms. Pays' granddaughter, who all lived together.
- The three regularly entered a weekly newspaper competition, each contributing one-third of the entry stake.
- All competition entries were made in Ms. Pays' name, with the understanding that any prize would be shared equally among them.
- On one occasion, their entry won a prize of £750.
- Ms. Pays refused to share the winnings, prompting Ms. Simpkins to seek her one-third share through legal action.
Issues
- Whether the informal arrangement among the parties to share competition winnings evidenced an intention to create legal relations, sufficient to form a legally binding contract.
- Whether the presumption against legal enforceability in domestic or social agreements could be rebutted by the facts of this case.
Decision
- The court held that a binding contract existed between Ms. Simpkins, Ms. Pays, and the granddaughter to share any winnings equally.
- The presence of an external party (Ms. Simpkins, the lodger) helped rebut the usual presumption against the intention to create legal relations in domestic agreements.
- The court found that mutual contributions and the explicit expectation of sharing both the stake and prize money demonstrated an intent to be legally bound.
- Ms. Simpkins was entitled to one-third of the prize.
Legal Principles
- The intention to create legal relations is assessed objectively by evaluating surrounding circumstances, contributions, and conduct.
- Domestic or social agreements carry a presumption against legal enforceability, but this presumption can be rebutted by sufficient evidence showing intent.
- The involvement of a non-family member and concrete contributions may indicate that parties intended their arrangement to be legally binding.
- Courts require a fact-specific inquiry into whether an agreement extends beyond a casual familial or social arrangement.
Conclusion
Simpkins v Pays [1955] 1 WLR 975 confirms that the presumption against legal enforceability in domestic settings can be rebutted where there is clear evidence of intention to create legal relations, particularly when an external party and financial contributions are involved.