Welch v Jess

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Welch v Jess is a New Zealand District Court case about when an agreement becomes a contract. It follows English decisions Simpkins v Pays and Connell v MIB.

Facts: Welch and Jess entered a Ninety Mile Beach fishing contest and pooled money into a prize kitty, agreeing to share any prize won. Jess later won $6,000 but refused to share, saying the arrangement was social and not legally binding.

The key question is whether there was an intention to create legal relations. The court uses an objective test: would a reasonable person read the agreement and think it created a binding obligation? This approach comes from Carlill v Carbolic Smoke Ball Co. There is a rebuttable presumption about intent that varies with the type of transaction, and it can be challenged by evidence showing there was no real intention to bind the parties.