Facts of the case:
Mr. and Mrs. Balfour were married. In Ceylon, Mr. Balfour worked as a civil
engineer. Mr. Balfour and his wife had a holiday to England in 1915, but his
wife became ill and her doctor informed her she couldn't return to Ceylon due to
her arthritis. They decided that Mrs. Balfour would stay in England while Mr.
Balfour would return to Ceylon. Mr. Balfour promised Mrs. Balfour that he would
pay her $30 every month until he returned.
However, the marriage deteriorated
and the husband stopped paying the payments. Mrs. Balfour, on the other hand,
decided to seek enforcement of the agreement and went to court. In the year
1918, Mrs. Balfour filed a lawsuit in court against Mr. Balfour for failing to
pay the sum owed to her.
The contract was deemed to be binding by the lower court, which was presided
over by Justice Sargant, an Additional Judge of King's Bench, who ruled in
favour of the plaintiff (Mrs. Balfour), noting that the husband was obligated to
financially support his wife, resulting in a legal contract. She obtained her
decree nisi in July and an order for alimony in December. After then, the matter
was appealed to the Court of Appeal.
- Does Mr Balfour promise to pay �30 per month to Mrs. Balfour establish a
valid contract which can be sued?
- Do domestic agreements come under the scope of contract law?
The rule here is whether an agreement between spouses is an enforceable
contract or only a social agreement. The idea is clarified when we learn that
Mrs. Balfour sued her husband not because he owed her a social obligation as her
spouse, but because he failed to honour his commitment.The rule that applies to
determine if an agreement is enforceable by law, we must examine whether it
fulfills all of the following conditions:
- Offer & acceptance
- Intention to create legal obligation
- Competence of Parties
- Free consent
According to the idea of creating legal intentions, in order for a contract to
exist, both parties involved must have the intention to engage into a legally
binding contract and be willing to suffer legal penalties if either one of them
fails to comply. The existence of legal connections between the parties is
correctly verified by evaluating the conditions present at the moment of
The lower court bench, led by Justice Sargant J, ruled that Mrs. Balfour's
consent was significant consideration to make this agreement an enforceable
contract. Mrs Balfour filed a contract lawsuit, arguing that Mr Balfour owed
maintenance not just because he married her, but because he had promised to do
so. However this decision got reverserd. Mrs. Balfour won at first instance, but
her case was unanimously overturned on appeal.
The Appellate Court bench of Warrington LJ, Duke LJ, and Atkin LJ found that the
agreement between Mr. Balfour and Mrs. Balfour was not enforceable and that the
two parties had no intention of establishing an enforceable contract. This
agreement is not contract because parties did not expect for their actions to
be accompanied by legal repercussions
Atkin LJ used the intention to form legal relations theory
which holds that
agreements or mutual promises between spouses or legally married couples,
commonly known as domestic relationships, cannot become enforceable contracts
because the courts would be swamped with petty cases and if such domestic
agreements are accepted by a court of law, it will open the door to an endless
number of lawsuits.
The agreement in question was not a formal contract, but
rather a domestic commitment that could not be enforced in court. The three
Justices focused primarily on the parties' husband and wife relationship,
holding that a promise between the couple would not constitute a contract.
The overall conclusion of the case is that an agreement between spouses is not
an enforceable contract and the Intention to create obligation is required to
create a legal contract, which was found to be absent in the instance of
Balfour v/s Balfour
. According to the court of appeal, the agreement was
primarily social and domestic in character, and it was presumed that the parties
did not intend to be legally bound.
The purpose of a party to form a legal relationship is determined by evaluating
the circumstances at the moment the contract is made. It makes no difference
whether a promise is made or not; it is the party's responsibility to keep it to
the best of their abilities. According to the domestic agreement, a commitment
made inside the family does not become a contract until and unless both parties
want to engage into a formal obligation.
We acquired a new perspective on contract validation from the case of Balfour
vs. Balfour. A contract is binding and enforceable under common law only when
the parties intend to create legal relations.
- Book referred:
Chapter, "Contracting in the Haven: Balfour and Balfour
Revisited" by M.D.A. Freeman from the book Exploring the boundaries of Contracts
by Roger Halson, 1996.
- Databases: Lexis Nexis; JSTOR;
- Hedley, S. (1985) Keeping contract in its place--Balfour v Balfour and
the enforceability of informal agreements, Oxford journal of legal studies,
5(3), pp. 391�415.
- Stephen Hedley, Keeping Contract in Its Place--Balfour v Balfour and the
Enforceability of Informal Agreements, Vol. 5, Oxford Journal of legal