Simpkins v Pays - 1955

Legal Case Summary

Simpkins v Pays [1955] 1 WLR 975

Intention to create legal relations in the formation of contracts in a domestic context.

Facts

Ms. Simpkins was a paying boarder at Ms. Pays house, who lived with her granddaughter. Ms. Simpkins habitually entered into newspaper competitions. Concerning one weekly Sunday newspaper competition, the three agreed that Ms. Simpkins would fill in a weekly coupon, with each person making three forecasts, yet submitting them in Ms. Pays name, and divide the prize in the event of winning. A forecast made by Ms. Pays’ granddaughter in one of the coupons submitted won a prize of £750 under Ms. Pays name. Ms. Pays refused to distribute the prize and Ms. Simpkins claimed for one-third of the prize under their agreement.

Issues

The question arose as to whether there was an intention to create legal relations in the informal arrangement between the Parties so as to constitute a legal agreement to distribute the shares.

Decision/Outcome

The Court held that, irrespective of the familial relations and the informal context, there was mutuality in the arrangement between the Parties, by which they agreed to the manner of the submission of the forecast in Ms. Pays name on a weekly basis and that, if there was a success, all three persons would share the prize money equally. Despite the domestic context, the filling out of the coupon by Ms. Simpkins was not a voluntary service to Ms. Pays but rather pursuant to an agreement by which each Party had shares in the result, thus showing an intention to create legal relations. The Court held that the mutual arrangement, no matter how informal, constituted a legally-binding agreement to divide the shares in thirds.