‘BALFOUR V. BALFOUR : A CASE STUDY’       

‘BALFOUR V. BALFOUR : A CASE STUDY’        

Decided on : 25^th June 1919

Court of Appeal : Court of Appeal of England and wales ( Civil Division )

Citation : (1919) 2 KB 571

Judges : Lord Justice Warrington, Lord Justice Duke, Lord Justice Atkin

Introduction

• In order for a contract to be valid, the intent to create a legal relationship is one of the most important elements of the Indian Contracts Act 1872. Section 10 of the Indian Contracts Act states that there must be an intent to create a legal relationship, so agreements of a domestic or social nature do not qualify as valid contracts.
• Balfour v. Balfour is the main case law based on this essential element of the contract. In this case it was acknowledged by the court that if an agreement is made in ordinary circumstances might be valid , but this same contract will become invalid if the intention to create a legal relationship is missing .

Facts of the Case

The appellant  in the above case  is Mr. Balfour who lived in Ceylon ( Sri Lanka ) with his wife .Once they decided to go for a vocation to England , in the year 1915 .Unfortunately during their stay at England Mrs. Balfour got sick with some serious illness which needed urgent medical attention .The doctor recommended her to stay in England for her treatment .Both the husband and wife came to an agreement that Mrs. Balfour will  stay back in England and Mr. Balfour will go back to Sri Lanka and pay his wife a sum of thirty pounds per month until he is back to England .

This agreement was made when their relationship was going well. As time passed both the husband and wife grew apart and bitterness germinated between them . This resulted in non–payment of the maintenance money agreed .Mr. Balfour then wrote a letter to his wife expressing their separation to be of a permanent .Eventually they got divorced legally . The problem which arouse now was whether the contract made before the divorce will be valid now .Mrs . Balfour had bought an action against Mr. Balfour for non–payment of the amount he was supposed to pay in court of law in the year 1918.

Procedural History of the Case

Judge Sargant who is an Additional Judge in the Royal Bench Division ruled that there is a valid contract between the two parties, namely the wife and husband and the husband is obliged to pay a living to his wife. The lower court ruled in favor of Ms Balfour (plaintiff) and ruled that the husband’s (defendant) promise to give money to his wife was enforceable. The wife’s consent to this agreement (for the transfer of one month per month) is a valid consideration for the formation of a valid contractual bond between the two parties.

In July, Ms Balfour received free will and in December even a maintenance order. According to the lower court, the contract was a binding contract, which Mr Balfour opposed.

Questions before the Court

1. Is the agreement considered a valid contract between them?
2. Does Mr. Balfour intend to enter into a legal relationship with the agreement?
3. Does the verbal agreement between the couple have legal consequences or is it just an internal and social agreement?
4. Can domestic and social agreements be enforced and fall within the scope of contract law?

Contention on the part of Mr. Balfour ( The Appellant )

The agreement made between Mr. Balfour and Mrs. Balfour is purely internal in nature and has no legal implementation. Furthermore, Mr Balfour never intended to enter into an agreement which by itself already exists.

Contention on the part of Mrs. Balfour ( The Respondent )

The husband is obliged to pay for her upkeep because, when the husband signs the domestic contract when the contract is made, he will pay him £30 for the upkeep he agrees to remain in England.

What was held in the case of Balfour v. Balfour (1919)

It has been accepted that the nature of the agreement  is purely domestic, Lord Judge Atkin believes that when a husband and wife enter into an agreement, they never intend to create a legal relationship. When concluding a contract, both parties must intend to establish a legal relationship, only then can it be enforced in court . Besides, the court will never take into account the internal agreements that the couple makes in their daily life . The agreement is completely outside the scope of the agreement.

Judgment

Agreements made between partners for the provision of capital are generally not contracts as the parties generally do not intend to pursue them for legal purposes. Usually, couples take care of personal or household expenses. Although there may be judgment if this happens between different countries. The Court of Appeals unanimously found that neither agreement was enforceable.

So Balfour’s law clearly shows that a legal intention to enter into a contract is indispensable. The Balfour Act revolves primarily around the concept of legal intent as fundamental and, in many cases, the need to ratify contracts.

Brief Analysis of the Case

First, Judge Sargant of First Instance ruled that Ms. Balfour’s claim was valid and that Mr. Balfour was entitled to pay her the promised maintenance.Finally, Mr Balfour appealed to the High Court. In an appeals court, a jury of Warrington LJ, Duke LJ and Atkin LJ found the agreement unenforceable in court. Atkin LJ keeps an eye on him because of his true nature. While Warrington LJ and Duke LJ did so because they doubted Ms Balfour had considered it. The doctrine of the intention to establish a legal relationship is mainly referred to by Atkin LJ.

It is said that doctrine is about public order and internal agreement has nothing to do with it. Courts cannot deal with such trifles regarding personal and family agreements.While there may be certain circumstances under which a husband and wife may enter into a legally binding agreement, in this case there is no such circumstance. This doctrine attracted attention and gained notoriety. This intention is sometimes called the animus contrahendi. In one of the subsequent Jones v Padawaton cases, Salmon LJ said it was factual. Has no legal presumptions. The intention to enter into a legal relationship is one of the essential elements needed to make a contract.

Conclusion

According to common law, a contract cannot be executed unless the parties intend the contract to create a legal relationship. Whether the parties intend to enter into a legal relationship or not is precisely determined after examining the conditions that existed at the time the contract was made. Regardless of whether a promise is made or not, the parties must fully comply with it. The parties cannot coerce, and the judges who made the decision have concluded that the court cannot enter into marital matters and be fully aware of their own problems. Balfour’s law thus provides a new perspective on the validity of the agreement.