What does the law presume regarding contracts made between family or close friends?

The correct understanding is that the law usually presumes there is no intention to create legal commitments in contracts made between family members or close friends. This presumption acknowledges the informal nature of these relationships and the likelihood that the parties may not intend for their agreements to be legally binding.

In professional contexts, contracts typically require evidence of intent to form a legal obligation, such as signatures and formal terms. However, personal relationships often involve agreements made in good faith without a desire for legal enforcement, which the law recognizes. As a result, family and close friends' arrangements often carry an understanding that these agreements are more about trust and mutual understanding than about enforceable legal commitments.

Legal enforceability usually applies to contracts that demonstrate a clear intention to create obligations, which is less common in personal relationships. Therefore, when a dispute arises, the presumption is that unless explicitly stated, these relationships do not imply a seriousness that legal commitments require.