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[1923] 2 K.B. 261 Page 131923 WL 18206 (CA), (1923) 14 Ll. L. Rep. 519, [1924] All E.R. Rep. 245(Cite as: [1923] 2 K.B. 261)be the intention of the parties that the matter inhand shall, if necessary, be so dealt with, or at leastthey must not have the contrary intention." SirWilliam Anson requires in contract "a commonintention to affect" the legal relations of the parties.FN24 [1919] 2 K. B. 571.FN25 Unreported. See The Times Newspaper,December 4, 1914.FN26 7th ed. (1921), p. 3.FN27 9th ed. (1921), p. 3.Judged by this test, I come to the same conclusionas the learned judge, that the particular clause inquestion shows a clear intention by the parties thatthe rest of their arrangement or agreement shall notaffect their legal relations, or be enforceable in aCourt of law, but in the words of the clause, shallbe "only a definite expression and record of thepurpose and intention of the three parties concernedto which they each honourably pledge themselves," "and shall not be subject to legal jurisdiction." Ifthe clause stood first in the document, the intentionof the parties would be exceedingly plain.The cases cited to us to the contrary were cases inwhich the form of the other part of the document,as a covenant in a deed, or a grant of a right inproperty in legal terms, clearly showed an intentionto create a legal right, and where subsequent words,purporting not to define but to negative the creationof such a right, were rejected as repugnant. InEllison v. Bignold [FN28], where the parties underseal "resolved and agreed and did by way ofdeclaration and not of covenant spontaneously andfully consent and agree, " Lord Eldon laid aside"the nonsense about agreeing and declaring withoutcovenanting." An agreement under seal is quiteinconsistent with no legal relations arisingtherefrom. And in the present case I think theparties, in expressing their vague and looselyworded agreement or arrangement, have expresslystated their intention that it shall not give rise tolegal relations, but shall depend only on mutualhonourable trust. This destroys the decision ofBailhache J. so far as it is based on the view thatthe document of 1913 gives rise to legal rightswhich can be enforced.FN28 (1821) 2 Jac. & W. 503, 510.*290 It was unnecessary for the judge below todecide the next point, whether, if the 1913document gave rise to no legal rights, the earlieragreements which contained no similar clausecould be enforced. This turned on whether theparties in coming to the agreement of 1913intended to rescind the earlier agreements except inso far as they were incorporated in the newagreement, and even then only to continue them ashonourable obligations. It follows from Morris v.Baron & Co. [FN29] that a valid contract may berescinded by an agreement unenforceable in law,the test being whether the parties intend to rescindthe old agreement, replacing it by a new agreementwhich may incorporate many of the old terms, ormerely to vary the old agreement which remainseffective except in so far as it is varied: see perLord Sumner, British and Beningtons v. NorthWestern Cachar Tea Co. [FN30] Morris v. Baron &Co. [FN31] also says that the intention of theparties would be a question of fact, though theHouse of Lords themselves decided the question offact: see per Lord Haldane. I have carefullyconsidered the documents and the forcibleargument of Sir John Simon on this point, and havecome to the conclusion that the parties whotransformed a contract between two parties into anhonourable arrangement between three partiesincorporating some parts of the old arrangement,varying others, and adding fresh terms, clearlyintended to abandon or rescind the old arrangementand leave their relations depending on the newhonourable understanding of 1913. Any alternativeclaim on the documents before 1913 therefore fails.FN29 [1918] A. C. 1, 21.FN30 [1923] A. C. 67.FN31 [1918] A. C. 1, 21.I should have been prepared, if the other membersof the Court had thought it right, to hear counsel forthe respondents further on this point. We intimatedduring their argument that we were with them onthis point but this, of course, could not be final aswe had not then heard Sir John Simon in reply. Onhearing him I was much impressed by hisargument, though I needed to look at thedocuments carefully to form a final opinion. I madea mistake in not asking Mr. Wright to complete hisargument, and should*291 have been ready torectify it by hearing any further arguments hewished to add; but as my Lord thinks it better tohave a new trial on this point, I can only say thatmy own opinion is as above stated. ThoughCopr. © West 2004 No Claim to Orig. Govt. Works