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Case Study

Mr. Balfour promised to pay his wife £30 per month while she stayed in England for medical treatment instead of returning with him to Ceylon. When he stopped making payments, she sued claiming it was a valid contract. The appellate court found the arrangement was a social agreement, not a legal contract, because Mr. Balfour did not intend to create a legal obligation in promising support to his wife. The court also noted that routinely enforcing intimate family agreements as contracts could flood courts with marital disputes. In a separate case, a servant searched for his master's missing nephew without knowledge of a reward offered to whoever found the boy. When he later learned of the reward, he sued but lost because acceptance

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10 views

Case Study

Mr. Balfour promised to pay his wife £30 per month while she stayed in England for medical treatment instead of returning with him to Ceylon. When he stopped making payments, she sued claiming it was a valid contract. The appellate court found the arrangement was a social agreement, not a legal contract, because Mr. Balfour did not intend to create a legal obligation in promising support to his wife. The court also noted that routinely enforcing intimate family agreements as contracts could flood courts with marital disputes. In a separate case, a servant searched for his master's missing nephew without knowledge of a reward offered to whoever found the boy. When he later learned of the reward, he sued but lost because acceptance

Uploaded by

Snehal Madhavi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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I. BALFOUR v.

BALFOUR

⮚ Citation: [1919] 2KB 571

⮚ Introduction: Landmark judgement on the intention to create a


legal relationship as an essential element of contract.

⮚ Parties: Mr. Balfour & Mrs. Balfour

⮚ Brief facts: Mr. & Mrs. Balfour use to live in Ceylon (now Sri
Lanka), a happily married couple. They went on a vacation to
England and during their stay Mrs. Balfour was diagnosed with
‘Rheumatic Arthritis’. The doctor advised her proper rest. Her
health could deteriorate, with the change in weather, therefore she
stayed back in England whereas her husband returned back to
Ceylon. As Mr. Balfour promised to send her £30 every month until
she stayed back. He regularly made the due monthly allowance as
promised but subsequently, stopped sending the amount. Mrs.
Balfour sued him for the payment of monthly payments.

⮚ Issue(s): Was there a valid contract between Mr. Balfour &


Mrs. Balfour?

Justice Sargent held that the said contract between the husband
& wife was valid and binding as Mr. Balfour was under
obligation to support his wife. The prior monthly transfers were
enough to form the basis of the contract between Mr. & Mrs.
Balfour and the consent of Mrs. Balfour to this arrangement
constituted a valid consideration. Mr. Balfour went to the Court of
Appeal against the judgment of the Division Bench.

⮚ Decision: The appellate court held that the arrangement


between Mrs and Mr Balfour was merely a social agreement and no
a contract. a domestic matter and Mr. Balfour had ‘no intention to
create a legal obligation’. The court also pointed out that, Though
Mr. Balfour made a promise to pay £30 per month and Mrs. Balfour
agreed to it but there was no intention to bound by legal
consequences on behalf of Mr. Balfour. The Court also held that
such types of agreements can’t be a contract because usually in
such agreements between the spouse, either of the parties do not
intend to bound themselves by legal consequences. Court also
made the argument that if the courts will they’ll start to
enforce such intimate arrangements made between couples treating
them as a legal contract then the courts shall be flooded by with
matrimonial disputes.

By studying and going through the case of Balfour vs. Balfour


(1919), we understand that a mere social agreement made within a
family can not be enforced in court of law, these agreements do not
hold any legally binding authority. Second thing is there must be an
intention to create a legal relation at the part of the parties. Owing
to all this, Mr. Balfour could not be sued by Mrs. Balfour in court of
law. This case has often been seen in conjunction with Merritt vs.
Merritt 1970] 2 All ER 760; [1970] 1 WLR 121. In this case, though
the couple was married but they already had an estranged
relationship, when the agreement was made, so in this scenario,
any sort of agreement between them was to be considered that of
legal in nature.

II. LALMAN SHUKLA v. GAURI DUTT

⮚ Citation: 1913 40 ALJ 489

⮚ Introduction: Acceptance of the offer as an essential element of a


valid contract.

⮚ Parties: Lalman Shukla & Gauri Dutt

⮚ Brief: Gauri Dutt’s nephew went missing. He therefore sent all


his servants in search of the absconding child, different places.
One of his servants, Lalman Shukla was sent to Haridwar from
Cawnpore (Kanpur) to search him, his travelling allowances and
other expenses were paid by the master Gauri Dutt. When he
returned back to Kanpur after getting succeeded in finding his
master’s nephew, he was given two sovereigns along with Rs. 20.
During the period while everyone was searching master’s nephew
and the plaintiff was also searching him, defendant circulated
pamphlets stating that whosoever finds the boy gets a reward of Rs.
501. The plaintiff had no idea about the reward and did not asked
for anything further and continued his service for six months.
After that, he filed a suit for the recovery of reward from his master,
he claimed for Rs. 499 out of the money that was offered in the
handbill. Then, the lower court dismissed the plaintiff’s plea.

⮚ Issue(s):

1. Does the arrangement amounts to a valid contract?

2. Is Mr. Lalman entitled to the reward amount?

3. Decision of the subordinate court was appropriate?

⮚ Decision: Court held that, none of the essential ingredients


required to for a for an agreement to be enforceable were not
fulfilled in the situation. The primary need for an agreement to be
enforceable is the ‘knowledge and assent of the particular offer.
Here, he was not aware about the offer and had no assent about the
act. Thus, it can be concluded that acceptance is the essence to
contract and the plaintiff was just fulfilling his obligation
by searching the missing boy.

Also, this is a leading case wherein the important principle of


General Offer was laid down. In such case, a contract could be
made only with the person who has the knowledge about the
offer and accepts it by acting accordingly to fulfil the
conditions mentioned in the offer.

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