It has generally been supposed that where two persons go through the form of offer and acceptance but at the same time mutually agree that their undertakings shall not be legally obligatory, they are not contractually bound. In fact, it has frequently been asserted that the intent to have legal obligation must appear affirmatively before a contract can be found to exist. It may be doubted whether this is so, since it is clear from the decided cases that no showing of such an intention is ever required. The intention to have a contract is invariably assumed to exist in the absence of affirmative evidence of a contrary intent. However, there is ample authority for the proposition that if it appears, either from the manifestations of intention indulged in, or from the surrounding circumstances, that the parties meant that their agreement should not receive legal sanction, they are not contractually bound. This is true although the agreement has all the other usual earmarks of a contract, namely, mutual assent and consideration. Thus it has been held that agreements made in jest, family arrangements, and social engagements are not contracts.

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