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Balfour v. Balfour is a foundational case in English contract law, decided by the Court of Appeal in 1919. The case clarified the principle that not all agreements are contracts, especially those made in a domestic or social context. It established the rule that for an agreement to be legally enforceable, the parties must have had an intention to create legal relations. This decision continues to guide courts in distinguishing between social promises and enforceable contracts, particularly within family relationships.
Landmark Case on Intention to Create Legal Relations in Domestic Agreements
Bench
- Lord Justice Warrington
- Lord Justice Duke
- Lord Justice Atkin
Court: Court of Appeal (England and Wales)
Facts
Mr. and Mrs. Balfour were a married couple who lived in Ceylon (present-day Sri Lanka), where Mr. Balfour worked as a government engineer. In 1915, they travelled together to England for a holiday. During their stay, Mrs. Balfour developed rheumatoid arthritis, and her doctor advised her not to return to the tropical climate of Ceylon due to health concerns. Therefore, the couple decided that Mrs. Balfour would stay back in England for treatment, while Mr. Balfour would return alone to resume his job.
Before leaving, Mr. Balfour promised to send his wife £30 per month as financial support during her stay. This arrangement was oral, informal, and made between husband and wife. For several months, Mr. Balfour followed through on this promise and sent the payments as agreed.
However, over time, their relationship deteriorated. They began living separately, and eventually, Mr. Balfour stopped sending the money. In response, Mrs. Balfour sued him in court, claiming that his promise was a contractual agreement and that his failure to pay was a breach of contract. She argued that she had relied on the monthly allowance, and it was made with the intention that it would be legally enforceable.
The case was initially heard by the King’s Bench Division, which ruled in favour of Mrs. Balfour, accepting that the promise to pay constituted a binding contract. However, Mr. Balfour appealed the decision to the Court of Appeal, arguing that no enforceable contract had ever existed between them.
Issues
- Was the agreement between Mr. and Mrs. Balfour intended to create legal obligations?
- Could a domestic arrangement between spouses be considered a legally enforceable contract?
Arguments
Appellant (Mr. Balfour):
He contended that the arrangement with his wife was simply a private, domestic understanding and not a legal contract. It was made at a time when they were living as husband and wife, and such agreements were part of the normal course of married life. He argued that neither of them expected or intended that this would be legally enforceable, and therefore, no binding contract was ever formed.
Respondent (Mrs. Balfour):
She argued that the agreement had clear terms—£30 per month—and was specific and certain, which made it enforceable in law. She claimed that circumstances had changed, especially since the couple had separated, and she was now financially dependent on that allowance. Therefore, she believed that the agreement should be treated as a binding contract, enforceable in a court of law.
Ratio Decidendi
The Court in Balfour v. Balfour (1918-19) established that agreements between spouses made in domestic contexts are presumed not to have legal intent. The Court of Appeal ruled that intention to create legal relations is a necessary element for the formation of a valid contract. In this case, the Court found that no such intention existed when Mr. and Mrs. Balfour made their agreement.
Lord Atkin, delivering the leading judgment, emphasized that domestic agreements between spouses, made while they are cohabiting, are presumed not to have legal intent. These agreements are typically based on trust, love, and mutual convenience, not legal enforceability. Courts cannot enforce every promise made within a marriage, as doing so would blur the line between family life and legal obligations.
Lord Atkin stated:
“The common law does not regulate the form of agreements between spouses. Their promises are often made in an atmosphere which does not contemplate legal consequences.”
He explained that the law draws a clear line between social or domestic arrangements and commercial contracts. In business dealings, there is usually a clear intention to be legally bound, but in family or personal relationships, that intention is often missing.
Therefore, even though there was consideration (Mr. Balfour’s promise to pay and Mrs. Balfour’s staying in England), the agreement still failed as a contract because it lacked the necessary legal intention.
Observation
The Court noted that legal systems should not interfere unnecessarily in domestic life. If every domestic promise could be litigated in court, it would open the floodgates to personal disputes being treated as legal claims, which is not what contract law is meant to do.
This case reinforced the idea that legal enforceability requires more than mutual consent—it requires a serious intention to enter into a legal relationship.
Decision
The Court of Appeal allowed the appeal, ruling in favour of Mr. Balfour, and set aside the earlier decision of the lower court.
The judges unanimously held that the promise made by Mr. Balfour was a domestic arrangement made within a functioning marriage and lacked legal intent. Because both parties did not intend to be legally bound, there was no valid contract.
Even though the promise was clear, specific, and acted upon for a while, the Court said that such promises are not enforceable unless the parties explicitly indicate a legal intent—which they had not done in this case.
The Court emphasized that legal agreements between spouses must be distinguished from commercial transactions. In the absence of a written agreement or clear evidence of legal intent, such domestic understandings cannot be enforced in court.
Therefore, the Court dismissed Mrs. Balfour’s claim, and Mr. Balfour was not legally obligated to continue the payments.
Conclusion
Balfour v. Balfour (1919) is a landmark case in contract law that established the vital principle that intention to create legal relations is essential for any agreement to become a binding contract. It also introduced the presumption against legal intent in domestic and social agreements, especially those made between spouses during a marriage.
This case helps students clearly understand that not all promises, even with consideration, are enforceable in law. The nature of the relationship and the context in which the agreement is made play a crucial role in determining whether it qualifies as a contract.
The ruling in Balfour v. Balfour continues to be a guiding light in distinguishing private social commitments from legally binding obligations and is one of the first cases taught in contract law courses worldwide.
Important Terms
- Intention to Create Legal Relations: A foundational requirement for contract enforceability; parties must intend that their agreement be legally binding.
- Domestic Agreement: Agreements made between spouses or family members, typically presumed not to be legally enforceable.
- Presumption Against Legal Intent: In social and family contexts, the law assumes no legal contract unless there is clear evidence to the contrary.
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Consideration: A benefit or value exchanged between parties—necessary but not sufficient for a contract unless legal intent is also present.