DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY,

LUCKNOW (U.P.)

SESSION 2015-2020

CONTRACT ACT-I

FINAL DRAFT ON:

CASE ANALYSIS: BALFOUR V. BALFOUR, (1919) 2 KB 571

Submitted for the project undertaken in partial fulfilment of

B.A. LL.B. (Hons.)

IInd Semester

SUBMITTED TO: SUBMITTED BY:

DR. V. VISALAKSHI CHITRESH BAHETI

ASSISTANT PROFESSOR SECTION A

RMLNLU (U.P.) ROLL NO. 44

 DECLARATION

I hereby declare that the project work entitled CASE ANALYSIS ON BALFOUR V.
BALFOUR, (1919) 2 KB 571 submitted to DR. RAM MANOHAR LOHIYA NATIONAL
LAW UNIVERSITY, LUCKNOW, is a record of an original word done by me under the
guidance of DR. V. VISALAKSHI, assistant professor at DR. RMLNLU. LUCKNOW. All
information collected is authentic to my knowledge, the work done by others if referred has
been properly acknowledged.

-CHITRESH BAHETI.
 CASE COMMENT:

BALFOUR V. BALFOUR, 2 K.B. 571 (1919)

FACTS:

Mr. Balfour (Defendant) and Mrs. Balfour (Plaintiff) lived in Ceylon and visited England on a
vacation. The plaintiff remained in England for medical treatment of arthritis and the defendant
agreed to send her a specific amount of money i.e. 30 each month until he could return back
to England. However, after his return to Ceylon he wrote her to say that it would be better that
their separation become permanent 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.

LEGAL HISTORY:

Mrs. Balfour obtained a decree and five months later was granted an order for alimony. The
lower court entered judgment in favour of the plaintiff and held that the defendants promise
to send money was enforceable. The court held that Mrs. Balfours consent was sufficient
consideration to render the contract enforceable and the defendant appealed it in Court of
Appeal.

ISSUES:

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. Yes. 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.
DISPOSITION:

The decision of lower court was reversed by the Court of appeal.

BENCH:

Full bench (Lord Duke, Lord Warrington and Lord Atkin)

COMMENTS:

The judgement of lord Warrington was reasonably based on the intention to bargain. He
contented the need to differentiate this agreement between husband and wife from other
agreements which takes place on daily basis. He emphasised that it can only be determined
either by proving that it was make in express terms or that there is a necessary implication from
the circumstances of parties, and the transaction generally, that such a contact was made.1 He
justified his decision by circumventing around the need for intention to bargain. According to
him a contract to bind the duty on a party whatever situations arises is not enough to decide the
situation of the parties and one cant decide the fate of contract by the position of parties.

Lord Duke questioned the indispensable element of forming a contract i.e. consideration.
According to him, one has to see whether there is any evidence of such exchange of promises
as would make the promise of the husband the basis of agreement. He opined that it is
impossible to say that where the relationship of husband and wife exist and promises are
exchanged, they must be deemed to be promise of contractual nature. In order to establish a
contract there ought to be something more than mere mutual promise having regard to domestic
relation of parties.2

Lord Atkin giving different opinion propounded that nobody would suggest in ordinary
circumstances that those agreement result in what know as a contract, and one of the most usual
form of agreement which does not constitute a contact appears to him to be the arrangement
which are made between husband and wife. It is quite common and it is the natural and
inevitable result of the relationship of husband and wife, that the two spouses can make

1
At page 575.
2
At page 576.
arrangements between themselves3. He is of view that there is proper consideration but he
opined the need for intention to create legal relationship. He said that the consideration is
obtained for them is that natural love and affection which court for so little in these cold courts.
He thought that the onus was on plaintiff and he hadnt establish any contract. He opined that
the letters do not evidence such a contract or amplify the oral evidence which was given by
wife, which is not in dispute.

The case is notable, not obvious from a bare statement of facts and decision. The peculiar
feature of this case is that Mrs. Balfour is suing Mr. Balfour for the promise which is made by
him to provide her money for her maintenance under contracts and not under the conjugal rights
held by Mrs. Balfour. This was a claim without precedent and the lordships 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 part4. Lord Duke and Lord Atkin were
prepared to assume that if normal principles were applied then Mrs. Balfour must win. But
Lord Warrington and Lord Duke figured out that the relationship between both the parties is
self-enough to displace the inference of contract. Parliament has created the rights and duties
between spouses, and if particular spouse intended to substitute a different scheme they had to
make this very clear5. Lord Atkin was of same view but he relied on the requirement of
intention to create legal relationship for all contracts.6 The court in precedents has refused to
enforce an agreement where the parties had intentionally excluded legal sanctions7 but in this
case for the very first time the court denied liability because the plaintiff could not prove that
legal sanctions were intended. Balfour V. Balfour created a new concept which being an
obstacle for the plaintiff in this case. Lord Atkins judgement attracted new attention and the
requirement of intention to create legal relationship achieved prominence.

The first point to note that the principle of intention make no room for the provision dealing
with no common view. In English law, it is presumed to be an indispensable element for
forming a contract. It is a settled principle that to create contract there must be common
intention of parties to enter into legal obligations8. There it is irrefutably presumed that the
parties had some common intention or other, evidence that they did not consider the matter at

3
At 578.
4
Husband and wife could not contract at all before the Married Womens Property Act, 1882.
5
At 575.
6
At 578-9.
7
Hussey v. Horne-Payne (1879) 4 App Cas. 311.
8
Atkin J at p. 293 in Rose & Frank co. v. J. R. Crompton & Bros, (1932) 2 KB 261.
all is treated simply as something that makes the courts enquiry more difficult.9 In cases where
there is no intention present, the insistence of parties must have some intention or other forces
the court to invent an intention. Of course there is always scope of judicial fictions whenever a
question turns on the intention of parties and there is no clear indication of what the parties
actually had in mind. But legal relations cases are particularly susceptible to this sort of
treatment, because cases where the parties do not consider the matter of legal enforceability are
the rule, not the exception. When the court purports to find an intention as to legal relations, it
can only be because the court thinks that legal liability should be present and imposes it on the
parties. The intention of parties can is naturally to be ascertained from the terms of the
arrangements and surrounding circumstances. When a court purports to find the legal
intention it can only be because the court think that legal liability should be present and to be
imposes on the parties.10 If the intention of the parties are not clearly stated, the court was led
to examine the general state of opinion that existed during that time and in particular the
sources which inevitably would have come into the hands of these man to shape
their....intention when making these agreement11

Mere agreements, or promises, intended to create mere social, political, or family obligations
or obligations of honour, or understood by both parties as a jest, do not create a contract. There
must be an intention to create obligations enforceable between the parties by legal sanctions.
In other words, it must be intended to create jural relations. This intention is sometimes referred
to as an animus contrahendi. Mere statements of intention, hope, anticipation, or expectation
do not create enforceable obligations. An agreement intended to create moral obligations only,
and not legal rights or obligations, does not create a contract. Also, the agreement may be
subject to a third person's consent, or any other condition precedent to it becoming operative
as an enforceable agreement. An agreement, though purporting to be made by one party without
prejudice to his rights, will operate according to its tenor and effect the rights of each party
accordingly. A stipulation whose enforcement against the party concerned rests upon his mere
will has no contractual effect.12

The judgements in cases decided on the basis of the principle formulated in this case would
have been in one way around same if the stated principle was not used by the judges as

9
Ford motor co. v. Amalgamated union of engineers and foundry workers, (1969) 1 WLR 339.
10
Hedley, Stephen. Keeping Contract in Its Place--Balfour V Balfour and the Enforceability of Informal
Agreements. Oxford Journal of Legal Studies 5.3 (1985): 391415.
11
Jones v. Padavattan, (1969) 1 WLR 350.
12
The Law of Vendor and Purchaser by Roy Milner Stonham.
precedent. To explain this the researcher must make differentiation between intend to create
legal relationship and contractual intent. When court ask whether contractual intent is present
in this case, they intent to ask does all the requirement of the contract including intention to
create contract is present or not? Thus intention is sub division of the contractual intent and
the two concept are interchangeable13 can only lead to confusion.14

In domestic cases, the rule is that the agreement will be enforced only at the instance of a party
who has performed one side of bargain, but there is no need to prove any intention that sanction
be available. In other words, the court concern is to prevent one side taking the benefits of
arrangement and refusing the burden, but they are unconcerned at the prospect of breach of
purely executory arrangement. Lord Bankes stated that in the case of arrangement relating
social relation it follows almost as a matter of course that the parties do not intent legal
consequences to follow. In case of arrangements regulating business relations it equally follows
the almost as a matter of course that the parties intent legal relation to follow.15

The requirement of intention to create legal relationship has been criticised by many jurist.16
Lord Cross of Chelsea did not think it is necessary that there should be positive evidence of
intention to contract.17 For analytical reason, it has been considered prudent to differentiate
between the various ingredients of a lawful contract. This problem arises in this case when lord
Atkin provided the definition of consideration. My lord insisted that arrangements made
between husband and wife are arrangements in which there are mutual promises, or there is
consideration in form within the definition that I have mentioned. Nevertheless they are not
contracts..because the parties do not intent that they should be attended by legal
consequences18. He defined consideration as consisting of a benefit received by one party or
a loss suffered by the other, but he failed to add that the benefit or loss must be received or
suffered as the price for other. An agreement between spouses may consist of mutual promises
and yet not be a contract precisely because the promise of one party is not given as price for
the other. The same reasoning can be applied to other domestic agreements. In case of Jones v.
Paddavaton19, my lord followed that principle laid down in Balfour v. Balfour that the
presumption against the intention to be bound in family matters has not been rebutted. This

13
As does Treitel (6th edn 1983) chap 4.
14
Hedley, B, Intention to create legal relationship (1970) CLJ 122.
15
Rose & Frank v. J R Crompton & bros, (1923) 2 KB 261.
16
Williston on contracts, 3rd edition.
17
Albert v. Motor insurers bureau (1971) 3 WLR 291.
18
At 578-579.
19
(1969) 1 WLR 328.
extension was preceded by various writers in their book but researcher think that these cases
may have been classified under different head in law of contracts.

In most situations the test for bargain provides a satisfactory answer to a policy question. It
also satisfies the theory of contractual autonomy since it is for the parties to cast their
transaction in form of bargain. The requirements of intention to create legal relationship,
additional to the test of bargaining have been criticised by various commentators.20 In essence,
the objection raised by the critics is that the whole basis of common law of contract is the
21
notion of bargain, of which offer, acceptance and consideration are indivisible facets. The
test of bargain was once used as test of contractual intention in case of Wyatt V. Kreglinger
and Fernau22. For example. Lord Atkin himself recognised the policy consideration behind the
non-enforceability of social and domestic arrangements when he said the small courts of this
country would have to be multiplied one hundred fold if these arrangements were held to be
legal obligation23 and that in these cold courts natural love and affection counted for little.
Consequently, each house is a domain into which the kings writ does not run24 This policy
can be flexibly implemented by applying the test of bargain.

It has been said that facts of this case stretched that doctrine to its limit, but the doctrine itself
has not been judicially questioned and the cases provide many others instances of its
application. It doesnt prevent a husband from making a binding contract with his wife, he can
be her tenant and binding separation agreement are often made when husband and wife agreed
to live apart.

The test of contractual intention is a matter of objectivity, not subjectivity. What matters is not
what a person is having in his mind but what a common person would think about in the given
circumstances and their intention to be. This type of cases are bound to be differentiated on the
ground of the determining factor of the facts of the case whether the conduct of the parties
affords evidence of objective intention.

In Indian law of contract it is still disputable that the requirement of intention to create legal
relation is required or not as in a manner developed in English law.25 But the evolvement of

20
Willianson on contracts, 3rd edn. S. 21.
21
Hepple, B. A. Intention to Create Legal Relations. The Cambridge Law Journal 28.1 (1970): 122137.
22
(1933) 1 KB 733.
23
At 579.
24
At 577.
25
CWT v. Abdul Hussain Md. Ali, (1988) 3 SCC 562.
the law required with the passage of time the honourable Supreme Court of India mentioned
the need of the stated principle in case of Banwari Lal v. Sukhdarshan Dayal.26

Instead of various criticism, It has been clear from a long line of judicial pronouncements27 that
this requirement of intention to create legal relationship is a necessity in addition to the
requirement of consideration as an element in the transaction.28 This development seems
incongruous and confused. With consideration serving as an evidence of the intention to create
legal relationships, the additional requirement to prove intention to create legal relationship as
an independent element suggests that consideration is no longer a given proof of the intention
of the parties to bind themselves legally. This view was also propounded in cases like Shadwell
v. Shadwell29, Jones v. Padavatton30, Pettitt V. Pettitt31 and many other cases.

CONCLUSION:

Although the researcher think that the concept of intention to create legal relationship is a
useful one in case where the parties make no specific declaration on the matter. But because it
has become so prominent and widely accepted that many cases are decided relying on this
principle even when they have no necessary connection with the doctrine. The result in these
cases would have remain the same if the law lacked requirement of legal relationship
requirement which is introduced by lord Atkin in Balfour v. Balfour.

The judgement of lord Atkin is one of that is most certainly quoted in the textbook and in the
subsequent judgements. His judgement clearly recognises the existence of intention to create
legal relationship and he applies it to the facts of the case. The judgement of other two judges
were more equivocal. The central problem for Warrington was whether or not it was possible
to imply a contract on the facts of case and while he made reference to question of whether or
not the parties intent to make a bargain which could be enforced by law to create legal
relationship. The judgement of Duke seems to be based rather more on doctrine of
consideration. As the law then stood, a wife has authority, under certain circumstances to
pledge her husbands credit for sustainable necessaries. In essence, this was the common law

26
(1973) 1 SCC 294.
27
Jones v. Padavattan, (1969) 1 WLR 328, Rose & Frank Co. v. J.R. Crompton and Bros, 1925 AC 445.
28
Edwin Peel (ed.), Trietel on the law of contracts, Sweet and Maxwell (12th edn., 2007) p. 190.
29
(1860) 9 C.B. (n.s.) 159.
30
(1969) 1 WLR 328.
31
(1969) 2 WLR 966.
remedy available to a wife who was not supported financially by her husband. Tus it was argued
on behalf of Mrs. Balfour that she had supplied consideration for promise to pay 30 a month
by refraining from pledging her husbands credit for necessaries. However Duke held that she
has not supplied consideration for her husband promise. His reasons for so concluding appears
to have been simply that the parties were still husband and wife at the time the promise was
made and this brings us back to the point that the reason for the failure of claims is to be found
in this fact that the parties were husband and wife, and had not separated, at the time the promise
was made.

This diversity in the reasoning of the court makes it difficult to discern the precise ratio of the
case. That said, courts in subsequent cases have not been unduly concerned by this point and
have turned to the judgement of Atkin for support for the prepositions that English law
recognise the existence of doctrine of intention to create legal relationship. The existence of
doctrine is now clearly established by authority, whatever doubts we may harbour about the
ratio of this case that is usually cited as the origin of the doctrine in English law. 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.

BIBLIOGRAPHY:

Hepple, B. A. Intention to Create Legal Relations. The Cambridge Law Journal 28.1
(1970): 122137.
Chloros, A. G. The Intention to Create Legal Relations. The Modern Law
Review 23.3 (1960): 331334.
Unger, J. Intent to Create Legal Relations, Mutuality and Consideration. The Modern
Law Review 19.1 (1956): 96100.
Hedley, Stephen. Keeping Contract in Its Place--Balfour V Balfour and the
Enforceability of Informal Agreements. Oxford Journal of Legal Studies 5.3 (1985):
391415.
Singh, Avtar. Law of Contract. 11th ed. Lucknow: Eastern Book, 1985.
Burrows, A. S. A Casebook on Contract. 5th ed. Oxford: Hart Pub., 2011.