Case Analysis of Balfour vs. Balfour [1919] via IRAC Method

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This article has been written by Shelal Lodhi Rajput, student of Symbiosis Law School, Pune

FORUM COURT OF APPEAL CIVIL DIVISION
CASE  Balfour v Balfour [1919] 2 K.B. 571
DECIDED  25 June 1919
RULE OF LAW  Agreements between husband and wife to provide money are generally not contracts because generally the “parties do not intend that they should be attended by legal consequences”.

 

FACTS OF THE CASE                                                                                                                                                                Mr. Balfour is the appellant in the present case. He used to live with his wife in Ceylon, Sri Lanka. During his vacations in the year 1915, they came to England. His wife became ill and needed medical attention. She was advised by her doctor to stay in England. They made an agreement that Mrs. Balfour was to remain behind in England when the husband returned to Ceylon (Sri Lanka) and that Mr. Balfour would pay her £30 a month until he returned. This understanding was made while their relationship was fine;however the relationship later soured.

After his return to Ceylon he wrote her to say that it would be better that their separation become permanent. The parties subsequently divorced and an issue arose as to whether agreement was enforceable and soon after that Mrs. Balfour sued him for restitution of her conjugal rights and for alimony equal to the amount her husband had agreed to send. In March 1918, Mrs. Balfour sued him to keep up with the monthly £30 payments.                                                                                   

In 1919, Balfour v Balfour gave birth to the intention to create legal relations doctrine in contract law.

PROCEDURAL HISTORY                                                                                                                                                         An additional judge of King’s Bench Division presided by Justice Sargant, held that the husband was under an obligation to support his wife and there exists a valid contract between the husband and the wife The lower court entered judgment in favour of the plaintiff and held that the defendant’s promise to send money was enforceable The consent of the wife to this arrangement of monthly transfer was a valid consideration to constitute a binding contract between the parties. In July she got a decree nisi and in December she obtained an order for alimony. The lower court found the contract binding, which Mr. Balfour appealed.

 ISSUES OF THE CASE

  1. Does intention of both parties to make an agreement be legally binding in order to be an enforceable contract?
  2. Under what circumstances will a court decline to enforce an agreement between spouses?

HELD

  1. Both parties must intend that an agreement be legally binding in order to be an enforceable contract.
  2. The court will not enforce agreements between spouses that involve daily life.

RULE                                                                                                                                                                                            The rule that applies in this case is relating to the separation of contract from promise and does agreement between spouses have any legal binding authority to enforceable as contract in court of law. The peculiar feature of the action was that Mrs. Balfour was suing in contract, claiming that Mr. Balfour should maintain her not because he had married her but because he had promised he would do so… This case involved a husband and wife so this arrangement is just a domestic or social agreement or arrangement. To enforce any agreement as a contract we need some essential elements in that agreement which are following:

  • Consideration
  • Legal intention to form the contract.

Agreements such as these are outside the realm of contracts altogether. The another rule is that in which court looked upon is which agreement will result into contract between spouses.

ANALYSIS / APPLICATION

In the present case at first instance Sargant, J., held that Mrs. Balfour’s consent was sufficient consideration to render the contract enforceable and the defendant appealed. But in appellate court it was held by bench of Warrington LJ, Duke LJ, Atkin LJ that it is not enforceable contract. Warrington LJ and Duke LJ did so mainly because they doubted that the wife gave consideration. Atkin LJ, on the other hand, invoked the intention to create legal relations doctrine to decide the case, a doctrine that up to that point could only be found in the textbooks.[1]

It can be said that the Doctrine is based upon public policy; that is to say that, as a matter of policy, the law of contract ought not to intervene in domestic situations because the courts would then be swamped by trifling domestic disputes.

The Court was of the view that mutual promises made in the context of an ordinary domestic relationship between husband and wife do not usually give rise to a legally binding contract because there is no intention that they be legally binding. However, the Court did concede that there may be circumstances in which a legally binding agreement between a husband and wife may arise.  The case is notable, not obvious from a bare statement of facts and decision. The claim was under contracts and not under the conjugal rights held by Mrs. Balfour. This was a claim without precedent and the lordship’s judgement will show how reluctant they were to extend the law of contacts into the area of matrimonial rights and duties, in which it had previously played very little part.[2] Lord Atkin’s judgement attracted new attention and the requirement of ‘intention to create legal relationship’ achieved prominence. The intention is sometimes referred to as an animus contrahendi. As Salmon LJ made clear in the later case Jones v Padavatton[3], this is a factual, not legal, presumption.

The test of contractual intention is a matter of objectivity, not subjectivity. What matters is what a common person would think in a given circumstances and their intention to be. It is clear from series of judgements (Shadwellv.Shadwell[4], PettittV.Pettitt[5]) apart from present case, requirement of intention to create legal relationship is necessity.

It is still an open question whether in the express provisions in the Indian Contract Act ,1872,the requirement of intention to contract is applicable in India.

CONCLUSION                                                                                                                                                                              “The agreement between the Balfours was not a legally enforceable contract but merely an ordinary domestic arrangement. There was no intention to create legal relations and Mrs. Balfour could not sue for the alleged breach of it.  The decision of lower court was reversed by Court of appeal.”

Whatever the exact status of Atkin LJ’s presumption, and indeed this is an issue on which there has been some controversy,[6]its effect has been to reinforce the sense that contractual and personal relations, like Venice and Belmont, are different realms(Merchant of Venice, contrast between the worlds of commerce and intimacy) .The diversity in the reasoning of the court makes it difficult to discern the precise ratio of the case. We must now turn to consider the scope of the presumption that parties to domestic agreements do not intent to create legal relationship, the factors that have been used by the courts in order to rebut the presumption, the rationale of the presumption and finally, the relationship, in the domestic context, between the doctrine of intention to create legal relations and the doctrine of consideration.

REFERENCES 

[1] S Leake The Elements of the Law of Contracts (London: Stevens and Sons, 1st edn, 1867) p 9;

[2] Husband and wife could not contract at all before the Married Women’s Property Act, 1882.

[3] [1969] 2 All ER 616 at 621

[4] (1860) 9 C.B. (n.s.) 159.

[5] (1969) 2 WLR 966.

[6] M Freeman ‘Contracting in the Haven: Balfour v Balfour Revisited’ in R Halson (ed) Exploring the Boundaries of Contract (Farnham: Ashgate/Dartmouth, 1996) p 68 at p 70;

  • Databases and online websites: LexisNexis, Wiley online library, E-lawresourcesuk, JSTOR
  • Books: The Elements of the Law of Contracts, M Freeman ‘Contracting in the Haven: Balfour v Balfour Revisited’ in R Halson.
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