ABC Inc and XYZ Ltd entered into a written agreement for the purchase and sale of paper products.That agreement contained a clause that said: "This arrangement is not entered into,nor is this memorandum written,as a formal or legal agreement,and shall not be subject to the jurisdiction of the Law Courts or in any other way be enforceable by law." ABC Inc wants the paper products,but XYZ Ltd refuses to deliver them.Which of the following statements is most likely TRUE?

Question

Quizplus · Accepted Answer

The clause in question clearly states that the agreement was not intended to be legally enforceable, and this suggests that the parties did not intend to create legal relations. This means that the agreement is legally unenforceable, regardless of whether it was written or not. The fact that ABC Inc wants the paper products does not overcome the legal hurdle created by the non-enforceability clause, as it is the intention of the parties at the time of entering into the agreement that determines whether it is legally enforceable or not.

ABC Inc and XYZ Ltd Entered into a Written Agreement