Decided on : 25 June, 1919
Forum : Court of Appeal Civil Division
Citation : 2 K.B. 571( Court of Appeal, 1919)
Rule of Law–
An agreement between wife and husband for providing money are not considered as contracts generally because, “both the parties do not have any intentions to attend any kind of legal consequences”.
The case Balfour v. Balfour in the year 1919, gave rise to an idea which is to establish legal relations theory in law of contracts. Lord Justice Atkin in a case where there was a dispute between a wife and husband, Justice Atkin said that, “domestic commitments does not fall within the jurisdiction of law of contracts”. The most important point made in the case was that contracts are promises. The question here arises that, if contracts are promise, whether they are legally enforceable or not?
The appellant in the above case is Mr. Balfour. Mr. Balfour lived in Ceylon, Sri Lanka with his wife. In the year 1915, Mr. Balfour along with his wife went to England. During their stay in England his wife became ill and required urgent medical attention. Her doctor advised her to stay in England only. So, both, Mr. Balfour and his wife made an agreement that while Mrs. Balfour will stay in England because of her ill-health and Mr. Balfour returned back to Sri Lanka, he will pay thirty pounds per month until he will return. This agreement was made when their relationship was fine, but with time there relationship got bitter.
When Mr Balfour returned back to Ceylon, Sri Lanka, he wrote his wife that he wanted their separation to be permanent. So, both the parties consequently divorced, after their divorce one problem occurred, the problem was whether the agreement which was made before the divorce would be enforceable or not. Mrs. Balfour sued Mr. Balfour for restitution of her conjugal rights and also for money which would be equal to the amount, which was agreed earlier by her husband, that he is going to send. Mrs. Balfour sued Mr. Balfour in the month of March 1918, for keeping the amount that is thirty pounds which he need to pay her monthly.
In the year 1919, the case Balfour v. Balfour gave rise to, “the intention to create legal relations doctrine in law of contracts”.
Procedural History of the case:
Justice Sargant, who was additional judge of the King’s Bench Division, held that there is exists a valid contract between both the parties that is, the wife and the husband and the husband is under the obligation to provide support to his wife. The lower court gave the judgement in favour of Mrs. Balfour ( plaintiff) and held that, the husband’s (defendant) promise to provide money to his wife was enforceable. The wife’s consent to this agreement (of transfer of month every month) is a valid consideration to establish a valid contract which is binding between both the parties.
In the month of July Mrs. Balfour received a decree nisi and in the month of December she even obtained an order for alimony. According to the lower court the contract was binding contract, which was appealed by Mr. Balfour.
Issues Involved in the Case:
- Did Mr. Balfour and Mrs. Balfour ever entered into any kind of agreement?
- Does the intentions to make an agreement between both the parties will be legally binding to be an enforceable contract?
- In what situations will the court decline to enforce an agreement between the spouses?
Held in the case:
- “ Both the parties must intend that an agreement be legally binding in order to be an enforceable contract.
- The court will not enforce agreements between spouses that involve daily life.”
The rule being applied in the above case is related to the differentiation of a contract from a promise and does the agreement between the spouses have any kind of legal binding power to enforceable as a contract in the court. The unusual feature in the case was Mrs. Balfour suing Mr. Balfour in the contract, alleging that it is Mr. Balfour duty to support her not only because they are married but also because the promise Mr. Balfour had made. As the case involved a husband and wife so the agreement was only a domestic agreement. To enforce any agreement as a contract, there are some essential elements which needs to be present which are as follows:
- Legal intention to form the contract.
Agreements like these are outside the scope of contracts. Other rule is that in which the court looked upon is which kind of agreement will result into a contract between the spouses.
Analysis of the case :
In the above case, Justice Sargant, held that the consent of Mrs. Balfour was sufficient enough to be considered as consideration to make the contract enforceable and Mr. Balfour appealed. But then in the Appellate Court it was held that the contract was not enforceable by bench of Warrington LJ, Duke LJ, Atkin LJ. Duke LJ, Warrington LJ primarily did so because they both suspected that Mrs. Balfour gave consideration. But Atkin LJ, invoked the intention to establish legal relations doctrine to determine the case, a doctrine that at that time could be found only in textbooks.
Therefore, it can be said that the Doctrine established on public policy, that is as a subject of policy, the contract law should not intervene in domestic situations, because the courts would be then flooded with unimportant domestic disputes.
The court observed that in case of domestic relationship between husband and wife the mutual promises made in such relationships does not give rise to legally binding contract as is no intention that promises be legally binding.
Though, the court accepted that there may arise situations in which an agreement which will be legally binding may be established. The case is prominent, but nit clear from just a bare statement of facts and decisions. The claim in the case was under the contract and not under the conjugal rights that was held by Mrs. Balflour. This was a claim without precedent and the judgement by the lordships will tell how reluctant they were to widen the law of contracts in the section of matrimonial rights and duties, in which it had earlier performed very less role. The judgement given by Lord Atkin invited new interest in the necessity of “intention to create legal relationship” attained importance. The intention are sometimes described as an “animus contrahendi”. Salmon LJ also made it clear in the case of Jones v. Padvatton, this is factual, and not legal presumption.
The test of contractual intention is not a matter of subjectivity and not objectivity. What is more important is that “what a common person would think” in a given situation and their intention to be. It is also evident from other judgments in the case of Pettitt v. Pettitt and also Shadwell v. Shadwell. Except from the case of Balfour v. Balfour, the requirement of intention to create legal relationship is important can also be seen in the above-mentioned cases.
But it is still an open question as to whether in the express provisions in the Indian Contract Act, 1872, the necessity of intention to contract is applicable in India.
“ The agreement between Mr. Balfour and Mrs. Balfour was not a legally enforceable contract but merely an ordinary domestic agreement. There was no intention to create any legal relations and Mrs. Balfour couldn’t sue for the alleged breach of it. The decision of lower court was reversed by court of appeal.”
No matter what the true status of Atkin’s LJ’s presumption will be, and undeniably it was an issue and there had been many controversies on it, its effect has been to strengthen the contractual and personal relations, like Venice and Belmont, are different kingdoms(in Merchant of Venice, the distinction between the worlds of intimacy and commerce). The variety in the perception of the court makes it tough to distinguish the accurate ratio of the case.
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 2 All ER 616 at 621(1969)
 2 WLR 966
 9 C.B. (n.s.) 159