A contemporary reimagining of the intention to create legal relations doctrine

Jeanette Ashton, Juliet Turner

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Ashton, J., & Turner, J. (2022). A contemporary reimagining of the intention to create legal relations doctrine
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 A CONTEMPORARY REIMAGINING OF THE INTENTION TO CREATE LEGAL

RELATIONS DOCTRINE

Keywords: Contract law, intention to create legal relations, England and Wales,

domestic/social presumption, commercial presumption, working practices

Abstract

This article examines the difficulties with the presumption/rebuttal model to assess intention

to create legal relations in contract law. It explores the blurred boundaries between

domestic and commercial agreements, proposing a new framework. This, we suggest,

would mitigate the problems seen in the case law to date and ensure the doctrine is fit for

the 21st century.

INTRODUCTION

Intention to create legal relations (ICLR) plays an important role in identifying which

agreements are legally binding. The law adopts an objective test 1 , making use of a

presumption/rebuttal model. In the case of ordinary commercial agreements there is a

presumption that the parties do intend to create legal relations 2 and it is not normally

necessary to prove intention. 3 However this presumption can be rebutted 4, the onus being

on the party who asserts that no legal effect was intended, with the burden a heavy one. 5

1
RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co. KG (UK Production) [2010] UKSC 14, [2010] 1
W.L.R. 753.
2
Esso Petroleum v Commissioners of Customs and Excise [1976] 1 W.L.R. 1, Edwards v Skyways [1964] 1 W.L.R.
349.
3
Chitty on Contracts Volume 1 General Principles, ed H. Beale, 33rd edn, (2020), 2-162.
4
Rose & Frank Co v Crompton Bros Ltd [1925] A.C.445; Edmonds v Lawson [2000] Q.B. 501.
5
Edwards v Skyways [1964] 1 W.L.R. 349 at [355].

1
Contracts relating to domestic/social agreements are presumed not to have intended to

create legal relations 6. Again, this presumption is rebuttable. 7

As will be explored, the doctrine is not without its critics and some commentators have called

for its removal altogether, arguing that the mechanism of offer, acceptance and

consideration make an additional requirement for ICLR superfluous. 8 We suggest that

intention does have a role to play, but is unsustainable in its current form.

We argue that there are two key tensions with the current doctrine. The first tension is that

the boundary between the commercial and domestic/social presumptions has become

increasingly blurred. The courts have had to assess the enforceability of agreements which

do not fit neatly into either presumption in a myriad of situations. These include the

contractual status of giving someone a lift to work; 9 religious ministries; 10 agreements in a

social setting to ghost-write a businessman’s autobiography; 11 banter in a pub between

colleagues; 12 and an alleged 13.5mn euro oral agreement regarding a share in the sale

proceeds of a business whilst at dinner in Mayfair 13. Analysis of the reasoning shows the

courts in these instances moving away from the presumption/rebuttal model, and instead

placing the onus on the party wishing to demonstrate ICLR, to prove it, making use of a

range of indicators to assess this.

The second tension relates to the presumptions themselves. Recent case law indicates that

the commercial presumption itself is perceived as useful in some, not all, commercial

cases 14. If the agreement is partly written/partly oral (or wholly oral), the courts have moved

6
Balfour v Balfour [1919] 2 KB 571.
7
Parker v Clarke [1960] 1 W.L.R. 286.
8
B.A. Hepple, ‘Intention to Create Legal Relations’ (1970) 28 C.L.J. 122 p.127.
9
Coward v Motor Insurers’ Bureau [1963] 1 QB 259, [1962] 2 W.L.R. 663.
10
Percy v Church of Scotland Board of National Mission [2005] UKHL 73, [2006] 2 A.C. 28; President of the
Methodist Conference v Parfitt [1984] Q.B. 368; and Moore v President of the Methodist Conference [2013]
UKSC 29, [2013] 2 A.C. 163.
11
Sadler v Reynolds [2005] EWHC 309 (QB), [2005] WLUK 238.
12
Blue v Ashley [2017] EWHC 1928 (Comm), [2017] 7 WLUK 593.
13
MacInnes v Gross [2017] EWHC 46 (QB), [2017] 1 WLUK 558.
14
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) at [82],
[2020] 3 WLUK 197.

2
away from the presumption and rebuttal model, in favour of once again, the onus being on

the person claiming that there is a contract to show ICLR (albeit a less onerous burden than

in a purely social agreement), again based on a range of indicators. 15

Equally, there are problems with the domestic/social presumption. Just over a century has

passed since Atkin LJ’s “celebrated judgment” in Balfour v Balfour (Balfour) 16 and there has

been longstanding feminist critique of the presumption. 17 The problems have not abated

over time, indeed quite the opposite, and the late 20th and 21st centuries have seen societal

changes and changing contemporary working practices, which make the doctrine in its

current form problematic at best, damaging at worst. As in the commercial sphere, the

courts have considered the enforceability of a range of agreements including pre-nuptial

agreements; 18 the legal implications of entering competitions with members of your

household; 19 and in the sphere of a family business. 20 The changing perception of the

‘domestic’ landscape would have been unimaginable in the time of Balfour. 21 As Freeman

notes, theirs was a Victorian marriage:

If Balfour was a “wise” decision based on the “realities” of life, then wisdom

dictates that we rethink the doctrine it embodies. It no longer reflects realities nor is it in

line with developments taking place in family law. 22

Other critics of the domestic/social presumption have noted that it is a ‘fiction’, with many

domestic/social agreements falling outside the remit of contract law, not because of the

intention of the parties, but for reasons of policy 23. The result of these tensions is that

15
Assuranceforeningen Gard Gjensidig v International Oil Pollution Compensation Fund [2014] EWHC 3369
(Comm) at [102], [2005] WLUK 238.
16
Jones v Padavatton [1969] 1 WLR 328 at [332].
17
P Saprai ‘Balfour v Balfour and the separation of contract and promise’ (2017) Legal Studies 37 No.3 p 470.
18
Granatino v Radmacher [2010] UKSC 42, [2010] 3 W.L.R. 1367.
19
Simpkins v Pays [1955] 1 W.L.R. 975.
20
Snelling v Snelling [1973] 1 QB 87.
21
Balfour v Balfour [1919] 2 KB 571.
22
M. Freeman ‘Contracting in the Haven: Balfour v Balfour Revisited’ in R. Halson (ed) Exploring the Boundaries
of Contract (Aldershot 1996) p 77.
23
H. Collins, The Law of Contract (Cambridge, 2003), 104-105.

3
judicial decision-making is inconsistent and unpredictable, as well as out of step with societal

changes which have seen a merging of the work/home relationship.

Notwithstanding these problems, which make revisiting the doctrine desirable, recent

developments in the law of contract, particularly the relaxation of the consideration

requirements, make a re-examination necessary. Commentators have argued that a

possible consequence of Williams v Roffey Bros & Nicholls (Contractors) Ltd 24 and the

missed opportunity of Rock Advertising Ltd v MWB Business Exchange Centres Ltd 25 to

clarify the promises to pay more/accept less distinction, is that the question of whether there

was ICLR, will move more into focus. 26

Various options have been suggested for the way forward, including maintaining the status

quo; removing the presumption solely in the domestic sphere; 27 and abandoning the doctrine

altogether on the basis of promise/bargain argument. 28 However, we argue it is time for a

contemporary reimagining of the doctrine with the introduction of a framework for

assessment of intention. Instead of utilising a domestic/commercial presumption and asking

whether this has been rebutted, the new framework uses a set of indicators to assess

intention. These indicators are evident in existing case law, and the aim is to bring

coherence to what is already happening, particularly in the lower courts. This fresh

framework, we suggest, has the potential to mitigate many of the problems of the doctrine,

bring it up to date, and help to ensure greater transparency in the decision-making process.

24
Williams v Roffey Bros & Nicholls (Contractors) Ltd. [1991] 1 QB 1, [1990] 2 W.L.R. 1153.
25
Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, [2018 2 W.L.R. 1603.
26
J.Ashton and J.Turner “Between a rock and a hard place? No consideration from the Supreme Court in Rock
Advertising Ltd v MWB Business Exchange Centres Ltd” (2018) ICCLR. 29(10), 593.
27
Saprai, see note 17 above p 492.
28
Hepple, see note 8 above.

4
1.FOUNDATION, DEVELOPMENT AND KEY PRINCIPLES OF THE DOCTRINE

Whilst a common perception may be that the doctrine of ICLR was developed by Atkin LJ in

Balfour 29, commentators have noted that its roots are in Roman law, where a lack of

seriousness obvious to both parties prevented the contract from coming into force. 30

Pollock’s first edition of ‘Principles of Contract at Law and in Equity’ of 1876 is thought to

have mandated the requirement of an ‘intention directed to legal consequences’ 31

and

Freeman states that, although Atkin LJ does not cite the commentators in the judgment, it is

‘inconceivable’ that he would not have read the calls for an ICLR requirement. 32 Set in the

historical context of economic liberalism of nineteenth-century England and influenced by the

work of French legal theorists 33, rules of contract law, primarily in line with an individualist

approach, were being developed apace.

Freeman notes that the decision in Balfour 34 was able to “clothe with authority” the prior calls

for an ICLR requirement, but that it wasn’t until the 1940s that Atkin LJ’s judgment came to

prominence. Prior to Balfour, the absence of consideration had been the reason not to

enforce a promise and this is certainly one strand of Warrington LJ’s position 35, interspersed

with an assessment of whether this agreement was contractual or “merely a domestic

arrangement such as may be made every day between a husband and wife who are living

together in friendly intercourse.” 36 However, whilst concluding that Mr Balfour was “bound in

honour” only in respect of the payments, 37 it is important to note that his conclusion was for

this particular situation and not a general ruling on the lack of ICLR in domestic settings. He

29
Balfour v Balfour [1973] QB 87.
30
G. Christandl in N Jansen, R Zimmerman, ‘Commentaries on European Contract Laws’ (Oxford 2018), 240.
31
F. Pollock, “Principles of Contract at Law and in Equity” in G. Christandl in N Jansen, R Zimmerman
‘Commentaries on European Contract Laws’ (Oxford 2018), 240.
32
Freeman, see note 22 above, on Leake, Pollock and Anson, p71.
33
R. Merkin and S. Saintier, Poole’s Textbook on Contract Law (Oxford 2019), 6.
34
Balfour v Balfour [1919] 2 KB 571.
35
Ibid at [574].
36
Ibid.
37
Ibid at [575].

5
is explicit on this point, stating “It may be, and I do not for a moment say that it is not,

possible for such a contract as is alleged in the present case to be made between husband

and wife” 38. It is arguable that the reason for the case’s prominence is largely due to timing

and Atkin LJ’s “flourish of language” 39, which will be explored in more detail below.

Saprai acknowledges that “It might be objected that the feminist critique of the doctrine that

[I] present here is aimed at case law that has been gathering dust.” 40 He continues that

whilst developments in family law and changing societal and judicial attitudes may lead us to

conclude that the doctrine is of academic rather than practical interest, it may be the case

that women and other vulnerable groups are deterred from bringing cases because of the

presumption. In order to gauge the best way forward, it seems apposite to highlight some of

the difficulties inherent in the doctrine, blow off the dust from a selection of that case law and

to re-evaluate the reasoning in light of those difficulties.

Key principles of the doctrine

In deciding whether there is ICLR, the courts apply an objective test, as illustrated in RTS

Ltd v Molkerei Alois Muller GmbH and Co KG 41. This objective approach can be seen in

application in a range of recent case law, 42 although the concept has been questioned. 43 In

the case of ordinary commercial transactions, there is a presumption that the parties intend

to create legal relations, as illustrated in Esso Petrolem v Commissioners of Customs and

Excise 44 and Edwards v Skyways 45 alongside more recent decisions such as Barbudev v

38
Ibid at [574].
39
Freeman, see note 22 above, p. 70.
40
Saprai, see note 17 above, p. 476.
41
RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH & Co. KG (UK Production) [2010] UKSC 14, [2010] 1
W.L.R. 753 at [45].
42
Edmonds v Lawson [2000] Q.B. 501 at [21], Barbudev v Eurocom Cable Management Bulgari Eood [2012]
EWCA Civ 548 at [30], 2012 2 All E.R. (Comm) 963; Dresdner Kleinwort Ltd v Attrill [2013] EWCA Civ 394 at [61]
and [62], [2013] 3 All E.R. (Comm) 607, and New Media Holding Company LLC v Ivan Kuznetsov [2016] EWHC
360 (QB) at [99], [2016] 2 WLUK 713.
43
See Megaw J in Edwards v Skyways [1964] 1 W.L.R. 349, at [356].
44
Esso Petroleum v Commissioners of Customs and Excise [1976] 1 W.L.R. 1.
45
Edwards v Skyways [1964] 1 W.L.R. 349.

6
Eurocom 46, Dresdner Kleinwort Ltd v Attrill 47 and New Media Holding Company LLC v Ivan

Kuznetsov. 48 It is however possible to rebut this presumption 49, the onus of proof being on

the party who asserts that no legal effect was intended 50. Recently in Dresdner Kleinwort

Ltd v Attrill 51, the court found an announcement of bonus payments during a ‘town hall’

meeting legally binding, demonstrating that the burden on the party asserting lack of

intention is an onerous one. 52 Interestingly, whilst academic commentators make use of the

language of presumption/rebuttal 53, practitioner texts such as Chitty refer to the same

concept in terms of burden of proof on the party asserting no legal effect.

The 2019 High Court decision in Volumatic Limited v Ideas for Life Limited 54 provides an

illustration of successful rebuttal of the commercial presumption. The court in this case had

to decide whether there was ICLR in connection with the design and production of a

banknote pouch to fit Volumatic’s cash counting machines. It was held, applying the

objective test, that the parties did not intend the agreement to be legally binding and it was

noted that given that the agreement was an express, written, commercial document, the

onus of proving no contractual intention was on the asserting party, with the burden being a

heavy one. 55

Conversely, there is a strong presumption in domestic/social agreements that the parties do

not to intend to create legal relations. This can apply in relation to domestic agreements

46
Barbudev v Eurocom Cable Management Bulgari Eood [2012] EWCA Civ 548, 2012 2 All E.R. (Comm) 963
47
Dresdner Kleinwort Ltd v Attrill [2013] EWCA Civ 394, [2013] 3 All E.R. (Comm) 607.
48
New Media Holding Company LLC v Ivan Kuznetsov [2016] EWHC 360 (QB) at [99], [2016] 2 WLUK 713.
49
Rose & Frank Co v Crompton Bros Ltd [1925] A.C.445.
50
Chitty, see note 3 above, 2-168/2-169. See also Megaw J in Edwards v Skyways [1964] 1 W.L.R 349 [at 355].
51
Dresdner Kleinwort Ltd v Attrill [2013] EWCA Civ 394, [2013] 3 All E.R. (Comm) 607.
52
Dresdner Kleinwort Ltd v Attrill [2013] EWCA Civ 394, [2013] 3 All E.R. (Comm) 607, at [63].
53
Stone and Devenney, see note 1 above, p. 132.
54
Volumatic Limited v Ideas for Life Limited [2019] EWHC 2273 (IPEC), [2019] 8 WLUK 183 – note appeal
outstanding.
55
Volumatic Limited v Ideas for Life Limited [2019] EWHC 2273 (IPEC) at [11] and [18], [2019] 8 WLUK 183.

7
between spouses 56 and civil partners, 57 and social agreements 58. Again, this presumption

can be rebutted, with examples of successful rebuttals being seen in agreements between

co-habitants where there has been an element of reliance 59; separating spouses; 60 pre-

nuptial agreements, 61 and in some ‘social’ situations.

2. BLURRED BOUNDAIRES BETWEEN THE PRESUMPTIONS

Despite the apparent clarity of the presumption/rebuttal model described above, there are a

burgeoning number of agreements whereby it is difficult to identify whether it is a commercial

agreement or social/domestic. In practice, the courts in these more nuanced settings,

appear to abandon the language of a presumption/rebuttal model and instead adopt a range

of indicators to assess intention.

Some agreements have a commercial basis, but a social element. An example of this is

Blue v Ashley, 62 which featured widely in the media and concerned an ‘agreement’ between

Mike Ashley, chief executive of Sports Direct, and a colleague made in colourful

circumstances. 63 Interestingly, the court deals with the question of intention 64 not through the

presumption/rebuttal model, but instead by considering a range of factors. 65 These include

the social setting; the purpose of the occasion; the nature and tone of the conversation; the

lack of commercial viability; the vagueness of the ‘offer’; the perceptions of the witnesses

and the perceptions of the claimant. 66 Similarly, the case of Sadler v Reynolds 67, falls

56
Balfour v Balfour [1973] QB 87.
57
Chitty, see note 3 above 2-180.
58
Chitty, see note 3 above 2-178.
59
Simpkins v Pays [1955] 1 W.L.R. 975.
60
Merritt v Merritt [1970] 1 W.L.R. 1211.
61
Granatino v Radmacher [2010] UKSC 42, [2010] 3 W.L.R. 1367.
62
Blue v Ashley [2017] EWHC 1928 (Comm), [2017] WLUK 5913.
63
https://www.bbc.co.uk/news/uk-england-40727521 (accessed 7 May 2020)
64
Blue v Ashley [2017] EWHC 1938 (Comm), [2017] WLUK 5913 at [55]
65
Ibid at [56]
66
Blue v Ashley [2017] EWHC 1928 (Comm) at [81-121].
67
Sadler v Reynolds [2005] EWHC 309 (QB), [2005] WLUK 238.

8
somewhere between the commercial agreement and social/domestic spheres. These two

cases are not simply outliers, and we find other recent examples of cases falling somewhere

between the two presumptions. In MacInnes v Gross 68 a 13.5-million-euro oral agreement at

a dinner in a Mayfair restaurant was found to have no ICLR. Whilst Coulson LJ noted that

the setting was not fatal in that a contract could occur “anywhere, in any circumstance”, the

highly informal/relaxed setting provided a counter-indication. In Wright v Rowlands 69 an

agreement on a yacht was found lacking the requisite intention. Whilst informality of setting

alone is not fatal, it is clearly a factor.

Another area relates to employment agreements. In Edwards v Lawson 70 the Court of

Appeal found intention in a claim by a pupil barrister in relation to her pupillage contract.

The Court of Appeal did not apply either presumption, stating that “[T]he context is all

important. 71 Again, we see the court turning away from the presumptions and instead

utilising a range of indicators to objectively assess intention. What seems decisive here is

the seriousness of the arrangement. 72

Similarly, there have been a range of cases dealing with disputes about the employment

status of religious ministers, which have raised issues of intention. In Percy v Church of

Scotland Board of National Mission 73 Lord Nicholls stated “[T]he context in which these

issues normally arise today is statutory protection for employees. Given this context, in my

view it is time to recognise that employment arrangements between a church and its

ministers should not lightly be taken as intended to have no legal effect and, in

consequence, its ministers denied this protection.” 74 In Percy, the requisite intention was

found and the claimant protected, however in Moore v President of the Methodist

68
MacInnes v Gross [2017] EWHC 46 (QB), [2017] 1 WLUK 558.
69
Wright v Rowland [2017] EWHC 2478 (Comm), WLUK 179.
70
Edmonds v Lawson [2000] Q.B. 501
71
Ibid at 414.
72
Ibid.
73
Percy v Church of Scotland Board of National Mission [2005] UKHL 73, [2006] 2 A.C. 28
74
Percy, ibid, at [26].

9
Conference 75 the court found there was no contract. In her dissenting speech in Moore,

Lady Hale states that “we can approach the issue with an open mind” 76 and that this can be

“without the distractions of a presumption against legal relations”. 77

Another ‘blurred’ area involves lifts to work, which again do not fit neatly into either

presumption. In Coward v MIB78 there was a finding of intention and it seems policy

considerations played a role here. However, in Albert v Motor Insurers’ Bureau 79 intention

was found, via the route of analysing the case as a commercial situation, therefore falling

within the commercial presumption. The question in Coward (whether driver could be

compelled to carry others in the future) was different from Albert (where the question was

whether there was an obligation to pay for a service already delivered. We would argue that

the law has had to utilise these fine distinctions to circumnavigate the problems created by

the presumptions themselves.

This section has demonstrated that there is a disconnect between what the law states it

does, utilising presumptions and rebuttals, and what actually occurs in practice, namely

looking at a range of factors to assess whether the reasonable person would expect legal

consequences to flow from the arrangement, whilst taking into account policy considerations.

It has shown that there are numerous cases which do not fit neatly into one category or the

other. We envisage that the number of cases which do not fit neatly into either category will

grow, with the blurring of the work/home delineation likely to increase in the post Covid-19

landscape and concur with Lady Hale that the presumptions are a distraction in such cases.

75
Moore v President of the Methodist Conference [2013] UKSC 29, [2013] 2 A.C. 163.
76
Moore, ibid, at [35].
77
Ibid at [45].
78
Coward v Motor Insurers’ Bureau [1963] 1 Q.B. 259.
79
Albert v Motor Insurers’ Bureau [1972] AC 301.

10
3. DIFFICULTIES WITH THE COMMERCIAL AND DOMESTIC/SOCIAL PRESUMPTIONS

Whilst the section above discussed the issues with the blurred boundaries cases, this

section highlights some of the difficulties with the presumptions themselves.

Commercial presumption

As previously noted, in the case of ordinary commercial transactions it is not normally

necessary to prove ICLR. The party seeking to prove absence of intention has the onus of

proof, which is a heavy one. This is said to apply whether the agreement is written or oral. 80

However, this seems at odds with what is happening in the courts in practice. In fact, it has

been said that it is only in ‘some’ commercial cases that ICLR is presumed 81 and that “the

presumption may not arise and is less useful where…there is no written, signed agreement

or single final email”. 82 In these situations, where the agreement is partly written/partly oral,

or wholly oral, the courts once again appear to turn to a range of indicators to objectively

assess intention.

In Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP 83, which will be

examined in more detail below, the judge stated:

In some commercial cases, it is presumed that upon the agreement of a contract, the

parties intended to create legal relations. However, that presumption may not arise

and is less useful where the existence of the contract is itself in issue, for example

because there is no written, signed agreement or because there is no single final

email recapitulation of the terms agree’. 84

80
Chitty, see note 3 above 2-168-170.
81
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) at [82],
[2020] 3 WLUK 197.
82
Ibid at [82].
83
Ibid at [87], [92-99], [100], [103-104].
84
Ibid at [82].

11
In this case the burden fell squarely on Moorgate to establish that there was a contract. 85

The judge felt that ICLR “takes on a greater importance” if a contract is oral or if oral and

written, as then the classical analysis of contract formation may not be “neat and tidy”. 86

Instead, in this type of situation the onus is on the party claiming that a binding contract was

made to prove ICLR.

Simlarly, in Assuranceforeningen Gard Gjensidig v International Oil Pollution Compensation

87
Fund , a combination of written and oral agreement, it was stated:

In such a case, notwithstanding the commercial context, I do not consider that it is

appropriate to approach the matter with a presumption that there was an ICLR. In a

hybrid case such as this, involving a combination of what the parties said and did and

no expressly stated offer to contract in the terms alleged, I consider that in principle

the onus is on the party claiming that a binding agreement was made to prove that

there was an intention to create legal relations 88.

The court found support for such an approach in the Court of Appeal decision in Blackpool

Aero Club v Blackpool BC 89 in which the burden of proof rested on the party alleging that a

contract was made, notwithstanding the commercial context. This seems to differ from the

presumption/rebuttal approach.

It might be suggested that requiring a party to prove intention may hinder contract formation.

Our response is that the courts are already requiring the person claiming a contract to

demonstrate intention in cases falling between a social/commercial situation or in hybrid

written and oral commercial agreements. The introduction of a fresh framework would

85
Ibid at [75].
86
Ibid at [81].
87
Assuranceforeningen Gard Gjensidig v International Oil Pollution Compensation Fund [2014] EWHC 3369
(Comm) at [102], [2005] WLUK 238.
88
Assuranceforeningen, ibid at [102].
89
Blackpool Aero Club v Blackpool BC [1990] 1 W.L.R. 1195.

12
facilitate a more transparent discussion of what actually occurs in practice. It is however,

essential that the structure and wording of the new framework does not impede the

formation of commercial agreements.

Domestic presumption

Criticisms

The criticism of the presumption against ICLR in a domestic setting as it currently stands,

simply put, is that it denies legal effect to agreements in the domestic context. This, Saprai

argues, drawing on the feminist critique of the Balfour doctrine which he describes as

“trenchant”, “leaves women vulnerable to the exploitation and distributive unfairness that

result when men break important promises (particularly when women rely or confer benefits

on the basis of these assurances).” 90 Freeman states that Atkin LJ’s privacy argument of

the “domestic code”, whereby “each house is a domain into which the King’s writ does not

seek to run…” 91 “needs to be recognised for what it is”, namely in a wider context of a legal

system where until 1962 husbands and wives could not sue each other in tort 92 and rape

within marriage only became a criminal offence in 1991 with R v R 93. This separation of the

domestic / ‘private’ sphere from the legal / ‘public’ world he argues, “devalues women by

saying that they are not important enough to merit legal regulation” and denies them the

legal relief which could result. 94 Keyes and Burns note that contract law is out of step with

Australian legislative developments in family law, which does recognise such ‘domestic’

90
Saprai, see note 17 above, p 473.
91
Balfour v Balfour [1919] 2 KB at [579].
92
Law Reform (Husband and Wife) Act 1962.
93
R v R [1991] UKHL 12, [1991] 3 WLR 767.
94
Freeman, see note 22 above, p. 74. He also discusses the issue of issue of ‘domestic’ abuse and the
longstanding reluctance of police authorities to intervene in such disputes. Although outside the scope of this
paper, this is an issue which has yet to be resolved, with the Domestic Abuse Bill having been re-introduced in
March 2020, following delays since the initial consultation after a 2014 HMIC report revealing significant
shortcomings in police response to victims https://www.gov.uk/government/speeches/hmics-inspection-of-
police-handling-of-domestic-violence-and-abuse (accessed 17 April 2020). .

13
agreements 95, and the same point can be made of England and Wales, though a

counterpoint is that this is the court deciding what is fair in the circumstances, rather than

enforcing agreements per se. 96 In exploring a way forward, it is essential to address the

issues raised by the feminist critique alongside appreciating the exponential changes in

concepts of the family and intimate relationships since Balfour 97 was decided.

Pushing the boundaries of the domestic/social sphere

Alongside the cases discussed above which lie somewhere between the two presumptions,

there are a growing number of cases which seem at the outer reaches of what could feasibly

be termed domestic or social. Modern family arrangements are very different from that of

the Balfours, a case heard not long after the time when wives could not legally hold

property 98 and for women, particularly non-working class women, working outside of the

home was not the norm as it is today. Whilst the changes in working patterns are outside

the scope of this paper 99, it is apparent that with flexible working, home working and the ‘gig

economy’, facilitated by now standard tech innovations and roles such as ‘influencers’, which

were not envisaged even a couple of decades ago, let alone a century ago, attempting to

separate the two spheres even if desirable, proves challenging.

Alongside this, couples or family members may, as illustrated by the trusts case Marr v

Collie 100, acquire investments together, such as a ‘buy to let’ property, and of course family

95
M. Keyes & K. Burns ‘Contract and the Family: Whither Intention (2002) Melbourne University Law Review
Vol 26 592.
96
See e.g. Matrimonial Causes Act 1973, Same Sex Marriage Act 2013, Civil Partnership Act 2004, as amended
by the 2019 Act, giving the courts wide-ranging powers of distribution on relationship breakdown. There has
been much debate on the lack of parity for cohabitees see e.g. Law Commission report 307 ‘Cohabitation: The
financial consequences of relationship breakdown (July 2007) and Cohabitation Rights Bill 2019-21.
97
Balfour v Balfour [1919] 2 KB 571.
98
Married Women’s Property Act 1882.
99
See M Taylor Good Work : The Taylor Review of Modern Working Practices (July 2017)
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/627671/
good-work-taylor-review-modern-working-practices-rg.pdf (accessed 17 April 2020).
100
Marr v Collie [2017] UKPC 17, [2017] 3 W.L.R. 1507.

14
businesses are commonplace, with intention in this context considered in Snelling v

Snelling. 101 Gulati notes “[P]eople are becoming more and more commercial even in familial

relations” and believes that the presumptions cannot be justified.’ 102 Gulati also raises the

issue of social and cultural differences and the prevalence of family businesses found in

many Asian countries. It is questionable whether Snelling v Snelling 103 addresses the family

business distinction in more than a perfunctory manner and it is arguably unlikely that the

Victorian textbook writers, which Freeman argues Atkin LJ drew on, would, at the height of

the British Empire, have concerned themselves with such cultural differences.

Findings of no intention: policy in another guise?

The cases discussed below consider whether there is or is not the requisite intention, but

ascertaining from the reasoning what intention actually is, is not easy. Many commentators

argue that these are effectively decisions of policy in another guise, with Hedley stating:

the wonderfully flexible doctrine of “intent to create legal relations” keeps legal contract-

talk out of areas the judges do not wish it to go – if contract seems unfamiliar and

desirable in a particular social context, the judges can simply declare the parties lack the

necessary intent. 104

This we suggest is a key reason for the need for a fresh approach. Atkin LJ in Balfour 105

explicitly discusses policy considerations with his floodgates argument, discussed below,

101
Snelling v John G. Snelling Ltd. and Others [1973] QB 87, [1972] 2 W.L.R. 588.
102
B. Gulati ‘Intention to Create Legal Relations’: A Contractual Necessity or an Illusory Concept’’ (2011) Beijing
Law Review, Vol 2, 129.
103
Snelling v John G. Snelling Ltd. and Others [1973] QB 87, [1972] 2 W.L.R. 588.
104
S Hedley Restitution: Its Division and Ordering (London 2001) p 76.
105
Balfour v Balfour [1919] 2 KB 571.

15
and commentators such as Hepple discuss the role of policy in decision-making. 106 Atiyah

describes policy as the “real reason” 107 and this fiction of intention argument is a persuasive

one, as Keyes and Burns note, “the parties are most unlikely to have considered the

question of their agreement at all, so proof of an actual intention, or lack thereof, is

impossible in almost all cases.” 108 Perhaps there has been a more honest discussion within

the law of equity and trusts, as seen in the discussion of inferred and imputed intention in

Stack v Dowden and Jones v Kernott 109, in the context of beneficial ownership of the family

home via a constructive trust. If, as Hedley notes, a key part of contract law is “gap-filling” or

“interpretation” 110, it is arguable that any modification to the current doctrine at the very least

needs to articulate how that is to be done.

4. DIFFICULTIES IN FOCUS: A CRITIQUE OF KEY CASES

This section revisits some of the authorities often cited when discussing the presumptions. It

is not intended to be a comprehensive review of those cases, but instead to highlight points

which will need to be considered when formulating a fresh framework.

Sadler v Reynolds 111

This case, a claim for damages for breach of an alleged contract to ghost-write an

autobiography, is a good example of the blurred boundaries between the presumptions.

Interestingly, it shows the courts’ overt recognition that there are cases which do not fit

neatly into either category, with the court noting “the facts of this case place the agreement

106
Hepple, see note 8 above, p 134.
107
S Smith Atiyah’s Introduction to the Law of Contract, Sixth edn., (Oxford 2006) p 103.
108
Keyes and Burns, see note 95 above, p 581.
109
Stack v Dowden [2007] UKHL 17, [2007] 2 W.L.R. 831, Jones v Kernott [2011] UKSC 53, [2011] 3 W.L.R. 1121.
110
Hedley, see note 104 above p 59.
111
Sadler v Reynolds [2005] EWHC 309 (QB), [2005] WLUK 238.

16
between the parties somewhere between an obviously commercial transaction and a social

exchange”. 112

This is problematic as it then impacts on the burden of proof. If the case had been perceived

as a commercial matter, then the onus would have been on the defendant to prove that there

was no ICLR, a heavy burden as discussed. If, however, the case was considered to fall

within the social/domestic presumption, then the onus is on the claimant to prove that there

was such intention, a lighter burden to discharge. After noting that contractual intention is

judged objectively 113, the judge states that:

the onus is on John Sadler [the claimant] to establish an intention to create legal

relations, albeit that the onus is a less heavy one than that which would be required

to establish such intent in the context of a purely social relationship 114.

Therefore, it seems the court found that the claimant had to show ICLR, as one would for the

social/domestic presumption, but with a reduced burden than normal, presumably to

acknowledge that it was not a purely social exchange and involved a business. In finding

that there was such an intention, there is no suggestion of the decision being based on a

presumption/rebuttal model of ICLR. Rather the approach was to put the onus on the

claimant to establish intention.

Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP 115

This High Court case, in which Moorgate (a corporate finance advisory firm) claimed the sum

of £1,000,000 from Sun European (a European private equity advisory arm of a global

112
Ibid at [56].
113
Ibid at [52].
114
Ibid at [56].
115
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm), [2020] 3
WLUK 197.

17
private equity firm) based on an alleged oral contract during a telephone conversation,

illustrates the difficulties with the commercial presumption itself. Adopting the traditional

presumption/rebuttal analysis, this prima facie can be seen as a commercial transaction,

which should therefore follow the principle that there is no need to prove ICLR. The party

seeking to deny intention, Sun here, would need to prove such absence.

However, in finding that no contract was concluded, the court considered one of the reasons

to be that Moorgate had failed to prove that there was mutual ICLR. This reasoning seems

inconsistent with the normal commercial presumption. The judge openly acknowledged that

the presumptions may not arise and are less useful in a range of ‘commercial’ cases, namely

those that are partly written/partly oral or those that are wholly oral. This sits uneasily with

practitioner texts, which say that the rules relate to written or oral contracts. 116

Instead of a presumption/rebuttal model, the court considered a range of factors. In making

an objective assessment as to intention, the following were considered important: evidence

of the parties' relationship and communications between the parties before, at the time of

and after the alleged contract was said to be formed, and evidence of market practices. 117

Persuasive factors were that the parties would have been unlikely to make such a contract in

a telephone call of only 10 minutes; absence of an engagement letter in line with usual

market practice; the unusually large size of the fee; failure in a later e-mail to mention the

agreement; the ‘agreement’ lacked specifics and was described as a proposal, which was

not mentioned in internal e-mails, and furthermore the Defendant had other advisors so it

was unnecessary to engage the Claimant.

Moorgate concludes that “the Court must consider all of the evidence available and

determine on an objective appraisal of such evidence whether the parties…intended to

116
Chitty, see note 3 above 2-170.
117
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) at [92].

18
create legal relations such that they are both bound by a resulting contract”. 118 This

appraisal by the court is far removed from a presumption of intention requiring rebuttal. It

would seem therefore that whilst the presumption of ICLR in commercial agreements is

appropriate in “ordinary commercial transactions” 119, there are some cases, as noted by the

judge in this case, that fall outside that normal rule and in those instances the courts prefer

to draw upon a range of factors to assess intention rather than employing the

presumption/rebuttal approach.

Balfour v Balfour

The facts of Balfour 120 are straightforward, an alleged verbal agreement by the defendant

husband to pay a sum of maintenance to his plaintiff wife, whilst he was overseas in Ceylon

on a government appointment, his wife having been unable to join to him for health reasons.

The dispute arose when the defendant took the decision to remain in post in Ceylon. With

Warrington LJ and Duke LJ discussing the undesirability of finding intention in this kind of

domestic context, but essentially leaning towards determining the issue via the absence of

consideration, it is as previously noted, Atkin LJ’s reasoning which has been accepted as

authoritative. Departing from the absence of consideration point, recognising that there will

be arrangements between spouses which do satisfy the definition of consideration, 121 he

finds that they are not contracts “and they are not contracts because the parties did not

intend that there should be legal consequences.” 122.

What appears to be lacking in this reasoning is on what basis lack of intention can be found.

It is arguably a triumph of form over substance “[T]he consideration that really obtains for

118
Ibid at [83]
119
Chitty, see note 3 above 2-168-169.
120
Balfour v Balfour [1919] 2 KB 571.
121
‘…some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss of
responsibility given, suffered or undertaken by the other.’ Ibid at [578].
122
Ibid at [579].

19
them is that natural love and affection which counts for so little in these cold Courts.” 123

What it seems to be distilled down to is a floodgates argument “…the small Courts of this

country would have to be multiplied one hundredfold if these arrangements were held to

result in legal obligations.” 124 It is not hard to find praise for the judgment. Writing in 1952,

Kahn-Freund talks of the “celebrated case”, describing it as “one of those wise decisions in

which the courts allow the realities of life to determine the legal norm which they

formulate.” 125 Whatever your view of the ‘realities of life’ in 1919 and 1952, it is hard to

disagree with Freeman’s comment above, writing in 1996, that the ‘realities of life’ have

changed and arguably a quarter of a century on, even more so. 126 Freeman asserts,

alongside the reductionist example given of two parties agreeing to take a walk which is

discussed below, that the floodgates fears are “entirely exaggerated, even more so in 1921

when there was no legal aid.” 127 Keyes and Burns are also critical of the floodgates

argument and don’t pull any punches, describing it as “among the most melodramatic

floodgates claims ever made…” 128 and noting the development of small claims tribunals and

alternative dispute resolution mechanisms which make the floodgates argument even harder

to sustain in current times.

Questioning the decision is not solely a late twentieth/early twenty-first century occurrence.

Writing in 1970, Hepple highlights the interesting House of Lords discussion on the

Balfour 129 principle in Pettitt v Pettitt 130, a case to determine the equitable interest of a

spouse in the marital home in the absence of legal interest. Hepple notes that “[Although]

Lord Atkin’s celebrated judgment has been accepted as authoritative for fifty years….there

123
Ibid.
124
Ibid.
125
O.Kahn-Freund ‘ Inconsistencies and Injustices in the Law of Husband and Wife (1952) MLR Vol 15 p138.
126
Freeman, see note 22 above.
127
Ibid p 70, though note that this article was published in 1996, pre Legal Aid, Sentencing and Punishment of
Offenders Act 2012, which effectively ended any legal aid for this kind of civil dispute, meaning the floodgates
argument is as limited now as it was when Balfour v Balfour was decided.
128
Keyes and Burns, see note 96 above p 585.
129
Balfour v Balfour [1919] 2 KB 571.
130
Pettitt v Pettitt [1969] W.L.R 966.

20
was a keen desire to limit its application”, being ‘described as “an extreme case” and one

which “stretched the doctrine ‘[T]hat in ordinary day-to-day life spouses do not intend to

contract’ to its limits.”’131 Lord Hodson states that “The Balfour decision has no direct

bearing on the kind of situation which has arisen here but I think it rightly indicates that the

court will be slow to infer legal obligations from transactions between husband and wife in

the ordinary course of their domestic life” 132 Treitel notes the “stretched to its limit” point in

Pettitt v Pettitt but goes on to say that “the doctrine itself has not been judicially

questioned” 133 and it certainly seems academic commentators are more critical than the

judiciary, who seem to distinguish rather than question. It is interesting that the reasoning in

Pettitt v Pettitt seems to suggest, though not define, tiers of domestic agreements,

distinguishing here on the basis of title to property and “property of the magnitude we are

now considering.” 134 This seems to introduce an additional layer of difficulty and begs the

question of what would constitute sufficient ‘magnitude’. Mrs Balfour was not bringing an

action to enforce a promised walk, to use Atkin LJ’s example, but a monthly maintenance

sum, presumably ‘serious’ enough to meet Fried’s test. 135

Hedley, disagreeing with the view that consideration or rather absence of, played a

significant part, states that what was key here was that Mrs Balfour would not be left without

a remedy as her claim in contract was additional to her orders already awarded for restitution

of conjugal rights and for alimony. 136 His view is that the absence of consideration argument

was not the real issue and that Sargant J’s finding of consideration, in Mrs Balfour’s consent

to the agreement, was a sound one, and that what was needed “was an excuse not to apply

131
Hepple, see note 8 above, p130 citing Lord Upjohn at [992] and Lord Reid at [973].
132
Pettitt v Pettitt [1969] 2 W.L.R. 966.
133
E. Peel Treitel on the Law of Contract 15th edn, (2020), 4-020.
134
Pettitt v Pettitt [1969] 2 W.L.R. 966 at [816].
135
Saprai, see note 17 above.
136
S.Hedley ‘ Keeping Contract in its Place – Balfour v Balfour and the Enforceability of Informal Agreements’
(1985) OJLS Vol 5 p 392. Interestingly the potential availability of an alternative remedy to the claim in contract
was noted in Diane Modahl v British Athletic Federation [2001] EWCA Civ 1447 at [81].

21
normal principle.” 137 Enter Lord Justice Atkin’s general requirement of ICLR for all contracts,

which Hedley argues is primarily “to keep contract in its place; to keep it in the commercial

sphere and out of domestic cases, except where judges think it has a useful role to play.” 138

Simpkins v Pays 139

This case, which Judge Sellers describes as ‘[H]appily…an unusual type of case to come

before a court of law’ 140 concerned a dispute over shares of prize money in a newspaper

competition, which the lodger plaintiff, defendant landlady and her granddaughter, not part of

the claim, entered weekly together, sharing the costs of entry. Acknowledging the informal

arrangement as to who paid the entry costs and postage, the key question was what the

intention was should they win. Sellers J, recognising the informality, concluded that the

basis was that any prize monies should be shared. Interestingly, them living “in harmony” 141

did not preclude a finding of ICLR, whereas in Balfour, the fact that the parties were living

together “in amity”, at least according to Lord Denning MR in Merritt v Merritt 142, would

appear to have been a key factor. Addressing the question of ICLR, Sellers J remarks:

It may well be there are many family associations where some sort of rough and ready

thing is said which would not, on a proper estimate of the circumstances, establish a

contract which was contemplated to have legal consequences, but I do not find so here. 143

137
Ibid.
138
Ibid at [393].
139
Simpkins v Pays [1955] 1 W.L.R. 975.
140
Ibid at [976].
141
Ibid at [977].
142
Merritt v Merritt [1970] 1 W.L.R. 1211.
143
Simpkins v Pays [1955] 1 W.L.R. 975 at [979].

22
The decisive factor here is the “mutuality” of the arrangement, which overrides the lack of

formality 144. This idea of mutuality or joint endeavour, involving some kind of shift in position

is explored later as an indicator for a fresh framework.

Parker v Clark 145

This case concerned an agreement for the defendant’s niece and her husband to move in

and assist the defendants, an elderly couple not in good health, with domestic chores and to

share the household expenses. This was on the understanding, as evidenced by a letter,

that the defendants would leave their house to the younger couple, who had sold their own

property, an agreement which the defendants later denied. Describing this, like Simpkins v

Pays above, as an “unusual sort of contract”, 146 Devlin J found for the plaintiffs. Addressing,

and then rebutting the Balfour presumption, he stated:

No doubt a proposal between relatives to share a house, and a promise to make a bequest

of it, may very well amount to no more than a family arrangement of the type considered in

Balfour v Balfour, which the courts will not enforce. But there is equally no doubt that

arrangements of this sort, and in particular a proposal to leave property in a will, can be the

subject of a binding contract. 147

He proceeds to say that intention is to be inferred from the language used and context and

whilst acknowledging the “lack of formality” here, makes the point that this is “largely

explained by the relationship between the parties; it is easier to demand formal documents

from a stranger than it is from a relative and friend.” 148 This is a compelling point, but was

not considered a factor in Balfour 149, where the reasoning seems to be that a level of

144
Ibid.
145
Parker v Clark [1960] 1 W.L.R 286.
146
Simpkins v Pays [1955] 1 W.L.R. 975.
147
Ibid at [292].
148
Ibid at [293].
149
Balfour v Balfour [1919] 2 KB 571.

23
formality would be necessary to rebut the presumption. What appears decisive in Simpkins

v Pays 150, is the shift in position, with the younger couple selling their property in reliance on

the promise, and the fact that the arrangements had worked successfully for more than a

year and a half. This aligns with Hedley’s suggestion that in the domestic context,

contractual liability will only be imposed if one side has already performed their side of the

bargain and is seeking reciprocity, 151 which was the situation here. We might then, wish to

evaluate the importance of ongoing agreements and whether an agreement is executed or

executory in formulating indicators for a fresh framework.

Jones v Padavatton 152

This case concerned a daughter, Mrs Jones, coming to England to study at the Bar, under,

she claimed, intense pressure from her mother, Mrs Padavatton, who gave her an

allowance. The agreement was subsequently varied, whereby her mother provided a house,

with the dispute heard in court concerning occupancy of the house when her mother sought

possession. The trial judge had refused to grant an order for possession on the basis that

the varied agreement had legal effect and therefore the daughter was entitled to remain.

The Court of Appeal allowed the appeal, finding no ICLR. Danckwerts LJ described the

action as “really deplorable”, stating that it was “distressing that they could not settle their

differences amicably”. 153 This gives a palpable sense from the outset of reluctance for this

dispute to be settled via the mechanism of contract law but this begs the question why, with

the dispute being very different from Lord Justice Atkin’s agreement to take a walk together

in Balfour, with the daughter having giving up a good job in Washington and moving to

England to retrain.

150
Simpkins v Pays [1955] 1 W.L.R. 975.
151
Hedley, note 136 above p. 393.
152
Jones v Padavatton [1969] 1 W.L.R. 328.
153
Ibid at [329].

24
Dividing the agreements into two parts, Danckwerts LJ finds consideration, at least for the

first part, with the daughter giving up her job in Washington, and studying at the Bar in

England, but then proceeds to focus on the form of the agreements, stating “[T]here were no

terms recorded in writing”, though a well-established principle of contract law is that a

contract does not have to be in writing to be valid, and noting there was “no sort of

businesslike statement of the parties’ respective obligations” (our emphasis). 154 He

highlights various ‘incidental matters’ which had not been decided, including how long the

agreement would last if the studies took longer than anticipated for part one and various

aspects of the living arrangements in the acquired house, where the other rooms were let to

tenants. Writing on relational contract theory, Keyes and Burns make the compelling point

that “In both commercial and family agreements, the long-term nature of the relationship and

related agreement impedes the ability to settle finally all terms at time of contract

formation.” 155 Reading this judgment, it is hard not to conclude that Danckwerts LJ was

looking for reasons to keep this contract in its place, to echo Hedley’s argument discussed

above. 156 Whilst acknowledging that there is no difficulty with family members entering into

legally binding contracts, he clearly prefers Atkin LJ’s “magnificent exposition of the situation

in regard to such arrangements in Balfour v Balfour” 157 to the decision in Parker v Clark 158,

though arguably the latter shift in position in reliance on an agreement was more analogous

to the situation at hand.

Salmon LJ reaches the same conclusion, but via different reasoning. Interestingly, his view

is that the uncertainties in the agreements do not preclude them from being contractual.

Focussing instead on the arrangements as to the house, he finds no evidence that the

mother had given up her proprietary rights, stating that the arrangements were “very vague

154
Jones v Padavatton [1969] 1 W. L.R. at [330].
155
Keyes and Burns, note 95 above.
156
Hedley, see note 136 above.
157
Balfour v Balfour [1919] 2 KB 571.
158
Parker v Clark [1960] 1 W.L.R. 280.

25
and made without any contractual intent” 159. Frustratingly, but perhaps unsurprisingly, he

does not address why there was no contractual intent, instead referring to Atkin’s “celebrated

judgment”, which is “not a presumption of law, but of fact..” and “derives from experience of

life and human nature which shows that in such circumstances men and women usually do

not intend to create legal rights and obligations, but intend to rely solely on family ties of love

and affection.” 160 Interestingly, like Dankwerts LJ, he cites Parker v Clark but does not

address it at all. Agreeing with the other two justices, but more aligned to Salmon LJ’s

reasoning in respect of the second agreement, Atkinson LJ describes this as a “most

unhappy case”, quoting the daughter’s words that she and her mother had been “very

close”. 161 This seems something of a distraction and it is questionable as to why this makes

intent less likely. After all, most commercial contracts are made on an amicable footing, why

should family/social agreements be any different?

Gould v Gould 162

This dispute concerned the enforceability of a husband’s promise, on leaving his wife and

two children, to give her £15 per week as long as he had it. Allowing the husband’s appeal,

the court found insufficient certainty for the requisite intent (Edmund Davies LJ and Lord

Megaw LJ, with Lord Denning MR dissenting). The majority judges focus on the words

used, with Edmund Davies LJ stating “those words [as long as he had it] import such

uncertainty as to indicate strongly that legal relations were not contemplated”, whilst

acknowledging that the probability of such intention “may” be greater than that of Balfour. 163

Lord Denning MR, echoing the discussion in Pettitt v Pettitt 164, makes the point that ‘’[The]

parties probably possessed no intention one way or the other. It is not the actual intention of

159
Ibid at [335].
160
Ibid at [332].
161
Jones v Padavatton [1969] 1 W.L.R. at [337].
162
Gould v Gould [1970] 1 QB 275.
163
Ibid at [381].
164
Pettitt v Pettitt [1969] 2 W.L.R. 966.

26
the parties, but the intention which the court imputes to them.” 165 The tension inherent in

assessments of certainty seem to align with the ‘fiction of intention’ point discussed above.

Denning concludes that although the qualification of the husband’s promise to pay as long

as he had it, lacks precision, this is not so uncertain as to render the whole agreement

void 166. His view is that a ‘”perfectly intelligible” term could be implied that the husband

would, if no longer able to manage the payments, give notice, but until such time would be

bound. 167

Merritt v Merritt 168

Decided shortly after Gould v Gould (Gould), 169

this case concerned a husband’s agreement

on separation to transfer the matrimonial home to his wife, in consideration for her paying

the outstanding mortgage payments. Distinguishing Gould, Jones v Padavatton 170 and

Balfour, 171
Lord Denning MR’s dissenting reasoning in Gould, is the majority view here, with

the question distilled down to whether the reasonable person would regard the agreement as

binding. According to Widgery LJ, there is “no room” for the Balfour presumption here

because the parties were separating at the time of the agreement and “that natural love and

affection has gone”, 172

with Karminski LJ agreeing. He notes that Mrs Gould had not sought

other remedies to which she would have been entitled because she believed that her

husband would fulfil his side of the agreement. It is suggested that it is this which seems a

more convincing reason to enforce the promise, than whether or not the agreement was

‘friendly’ or not. In thinking about a way forward, the ‘friendly’ living ‘in amity’ argument as

bolstering the application of the presumption against intention in a domestic context, seems

unsustainable.

165
Gould v Gould [1970] 1 QB 275 at [279].
166
Ibid.
167
Ibid at [280].
168
Merritt v Merritt [1970] 1 W.L.R 1211.
169
Gould v Gould [1970] 1 QB 571.
170
Jones v Padavatton [1969] 1 W.L.R. 328.
171
Balfour v Balfour [1919] 2 KB 571.
172
Merritt v Merritt, [1970] 1 W.L.R. at [1214].

27
Featuring again, in Snelling v John G. Snelling Ltd. 173, a dispute between brothers, all

directors of the family business, Ormrod J distinguishes Balfour 174 as having “wholly

different”’ circumstances, with the relationship here having been “destroyed by dissensions”

with “[N]othing but the biological tie” remaining. 175 Here the context suggested that they

intended to be bound, as did the language. Addressing the argument that the terms were

too vague or uncertain, Ormrod J states that, where an agreement is, as here, prepared by

laymen rather than lawyers, the court “ought not to seek ways for avoiding it but rather to do

its utmost to give effect to it if it is possible to do so”. 176 This echoes Lord Denning MR’s

reasoning in Gould 177 and it is suggested that if this is to be the approach for agreements in

a commercial setting, as was the case with the Snelling brothers, the same should be

applied in a domestic/social setting, with arguably greater latitude in the latter in respect of

the form of the agreement.

4. TIME TO REMOVE INTENTION OR FOR A FRESH FRAMEWORK WITH

INDICATORS?

From the above discussion, it is clear that maintaining the status quo is undesirable, with an

expanding number of cases not fitting into either presumption and any attempts to categorise

such cases becoming unwieldy. 178

Removing the doctrine altogether has the merit of simplicity. Arguably, the requirement of

ICLR is superfluous and the tools for establishing contract formation, namely offer and

173
Snelling v John G. Snelling Ltd. and Others [1973] QB 87.
174
Balfour v Balfour [1919] 2 KB 571.
175
Snelling v John G. Snelling Ltd. and Others [1973] QB 87 at [93].
176
Ibid at [95].
177
Gould v Gould [1970] 1 QB 571..
178
Chitty, see note 3 above 9 – Contractual Intention.

28
acceptance consideration, alongside the ability of the courts to imply terms, particularly with

the recent Supreme Court decision in Wells v Devani clarifying on what basis such terms are

to be implied, are sufficient, though the focus may simply shift to issues of certainty. 179

Keyes and Burns argue that the distinction between the two types of agreement “serves no

legitimate purpose”, but instead “performs a powerful symbolic function delineating the realm

of law from the realm of the family and the feminine, preferring the former over the latter.” 180

However, this brings us to the issue of the changes to consideration in Williams v Roffey

Bros. 181 and it is suggested that if this is to be the way forward, clarification by the Supreme

Court, particularly in contractual modification agreements, in both a domestic/social setting

and a commercial one, is necessary to avoid uncertainty.

Saprai makes a compelling argument against the separation of promise from intention 182.

He suggests that in addition to the promise, there needs to be a level of seriousness and a

contemplation, at least in part, of subsequent legal enforcement 183. Alongside the ‘fiction of

intention’ point discussed above, Saprai argues that this argument is hard to sustain when

considering cases like Balfour 184 and Gould 185, as the ‘promises’ pertained to financial

arrangements which certainly seem ‘serious’. Analogous to Saprai’s argument that promise

and intent should not be separated, the same can be suggested for consideration and intent

in respect of enforceability. Hepple notes that the requirement of ICLR, in addition to the

bargain requirement of the doctrine of consideration has been subject to much criticism by

academic commentators 186 and states that ‘[T]his test of bargain renders superfluous any

additional proof of intention’. However, since Hepple’s paper was published in 1970,

changes to the doctrine of consideration, in particular the ‘practical benefit’ development of

179
Wells v Devani [2019] UKSC 4, [2019] 2 W.L.R. 617.
180
Keyes and Burns, see note 95 above.
181
Williams v Roffey Bros and Nicholls (Contractors) Ltd. [1991] 1 QB 1, [1990] 2 W.L.R. 1153.
182
Saprai, see note 17 above.
183
Ibid, p 477.
184
Balfour v Balfour [1919] 2 KB 571.
185
Gould v Gould [1970] 1 QB 571.
186
Hepple, see note 8 above p127

29
Williams v Roffey 187 in promises to pay more contractual modifications, mean that

consideration is perhaps not the bulwark it once was.

If the requirements of consideration have been relaxed through Williams v Roffey 188

‘practical benefit’, there is no reason why this should not apply in a domestic context too.

Consider, disregarding any statutory obligations, if for example, a previously cohabitant

father leaves the mother as primary carer of the children, agreeing to pay a certain sum per

month, but then, on receipt of a salary increase, offers to pay more. He then reneges on the

promise. Is the second promise enforceable on the basis of ‘practical benefit’, with the

children able to say, go on a school trip or afford music lessons even though the mother has

not ostensibly changed her position? If it is, presuming the first promise can be

distinguished from Balfour 189 on the Merritt v Merritt basis of separating parties who “bargain

keenly” 190, then does the second promise also need, if consideration is established, to fulfil a

separate ICLR requirement? Hepple, while not considering the question in detail, notes the

view of some commentators that the doctrine of consideration could be abolished because

the rules assessing the ‘seriousness’ of a promise would remain 191. Conversely, it is

possible to argue that if consideration is found, there is no need for a separate requirement

of intention 192. If one favours retaining consideration and ICLR, or retaining one and

removing the other, as the reason for enforcing a promise, it is desirable that there should be

less obfuscation as to what those requirements actually are.

Whilst a comparative analysis is beyond the scope of this article, it is interesting to note the

role of ICLR in other jurisdictions. An initial survey of the European civil jurisdictions shows

that ICLR is necessary, but commentators note that “[T]he ‘intention to be bound’ is usually

187
Williams v Roffey Bros and Nicholls (Contractors) Ltd. [1991] 1 QB 1, [1990] 2 W.L.R. 1153.
188
Williams v Roffey Bros and Nicholls (Contractors) Ltd. [1991] 1 QB 1, [1990] 2 W.L.R. 1153.
189
Balfour v Balfour [1919] 2 KB 571.
190
Merritt v Merritt [1970] 1 W.L.R 1211 at [1213].
191
Hepple, see note 8 above p122 citing Chloros.
192
Hepple, see note 8 above.

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discussed in very general terms.” 193 The Principles of European Contract Law state that the

intention of a party to be legally bound is to be determined from the party’s statements and

conduct as reasonably understood by the other party 194. Similarly, the UNIDROIT principles

state that “Since such an intention will rarely be declared expressly, it often has to be

inferred from the circumstances of each individual case" 195.

Despite the problems explored throughout this article, in our view ICLR still has a key role to

play in determining enforceability of agreements. Removing the requirement altogether

would, we suggest, create a fresh set of difficulties, particularly with the current uncertainty

with consideration. Instead, a reimagining of the doctrine has the benefit of drawing on the

wealth of previous decisions as to determinative factors for enforceability, whilst developing

the law in line with socio-economic changes, ensuring it is fit for the 21st century.

5. A FRESH FRAMEWORK

Our view is that it is time for a reimagining of the doctrine. Our proposed framework retains

ICLR as a tool to assess enforceability of agreements, and retains the presumption/rebuttal

model for clear commercial agreements, where, we suggest, the model works well. For all

other agreements, if ICLR is pleaded as an issue, the ‘presumption/rebuttal’ model should be

replaced with a new framework with a series of indicative factors, drawn from the existing

body of case law, which the courts can utilise to objectively assess intention. This, we

suggest, will move away from problematic labelling of agreements as ‘domestic’, increase

193
G. Christandl in N Jansen, R Zimmerman, ‘Commentaries on European Contract Laws’ (Oxford 2018), 241 –
see e.g. the French law of obligations requirement of intention in Article 113 code civil.
194
Principles of European Contract Law, Article 2:101(1): Conditions for the Conclusion of a Contract – a
contract is concluded if: a) the parties intend to be legally bound. Article 2:10: Intention – the intention is to
be determined from the party’s statements or conduct as they were reasonably understood by the other
party.
195
UNIDROIT Principles of International Commercial Contracts 2016, Article 2.1.2.

31
transparency and, rather than being a departure from the current position, reflects what is

happening in practice.

Indicators:

Where intention is disputed, these can be used to objectively ascertain whether there was

the requisite intention and a party wishing to demonstrate intention will need to provide

evidence pertaining to such. The indicators are intended to be a range of factors to assess

ICLR, not all the indicators will feature in any one case, and it may well be that one is more

determinative than another. This is an approach familiar to contract law and should not

present any difficulty 196, particularly given that they are drawn from existing decisions.

a. Language used

In most of the ‘domestic’ cases discussed, in line with Lord Denning’s comments in Gould 197,

there is no express discussion of ICLR. However, if there were such discussions, clearly

these would need to be considered. Evidentially of course this can be problematic and there

are many examples of constructive trusts of the family home cases which highlight vague

recollections of such conversations 198. Looking at the more ‘commercial’ case law, we find

frequent references to the language used, examples being Blue v Ashley, which notes “the

nature and tone of the conversation” 199

, and New Media Holdings, where the language used

was “consistent with a legally binding agreement”. 200

196
See Lord Bridge’s comments on exemption clauses in George Mitchell (Chesterhall) Ltd. v Finney Lock Seeds
[1983] 2 AC 803 at [816].
197
Gould v Gould [1970] 1 QB 571.
198
See e.g. Eves v Eves [1975] 1 W.L.R and Lloyds Bank v Rosset [1991] 1 AC 107.
199
Blue v Ashley [2017] EWHC 1928 at [85].
200
New Media Holding Company LLC v Ivan Kuznetsov [2016] EWHC 360 (QB) at [105]. See also Barbudev v
Eurocom Cable Management Bulgari Eood [2012] EWCA Civ 548 at ]37]: ‘its language is that of legal relations’
and Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) where
the judge considered the use of the word ‘proposal’ to be indicative of lack of intention.

32
If, as was the case in Snelling v Snelling, 201
there is a written agreement, this will need to be

evaluated in light of the overall context. Here Ormrod J found the use of the word “forfeit”,

“we hereby agree” and reference to “the court” indicative of legal intention. It is suggested

that whilst it is clearly important to look closely at any language used, a lack of formality and

legal sounding words, which are less likely to be used in an agreement in a family/social

setting, should not preclude a finding of intention.

b. Reliance / shift in position

Atiyah, whilst acknowledging that the Balfour presumption ‘seems appropriate in principle’,

suggests that where a party has “detrimentally relied” on the agreement, it may be

appropriate to allow a claim on a reliance basis, even if contractual damages on an

expectation basis, were denied. 202 It is outside the scope of this paper to explore that

suggestion, but reliance was a decisive indicator in Parker v Clark. 203 This is familiar to

contract law, seen also in the doctrine of promissory estoppel, and we see reliance / shift in

position in a number of the cases. This could encompass the combined efforts and

‘mutuality’ which were decisive in Simpkins v Pays 204 and may, though not necessarily,

include a financial element, such as the sharing of entry fees in that case. Such mutuality

would also apply in, for example, couples acquiring assets with the understanding that these

were to be shared jointly.

Subsequent conduct is considered important in many of the commercial cases and links with

reliance and shift of position. In New Media Holdings, the judge states that “[S]ubsequent

201
Snelling v John G. Snelling Ltd. and Others [1973] QB 87.
202
S. Smith, Atiyah’s Introduction to the Law of Contract, 6th edn (Oxford 2006) p. 104.
203
Parker v Clark [1960] 1 W.L.R., where the younger couple sold their house and moved in with the
defendants.
204
Simpkins v Pays [1955] 1 W.L.R. 975 at [978] and [979].

33
conduct can be taken into account as objective evidence of whether or not the parties

understood themselves to have concluded a contract and to have been bound by such a

contract”. 205 In Blue v Ashley, the fact that Mr Blue had waited nearly a year before

mentioning the ‘agreement’ was strongly indicative of absence of ICLR, 206 as was the

absence of any mention of the ‘agreement’ in subsequent emails in Moorgate. 207

We suggest that requiring a financial outlay for a finding of intention, would be counter-

productive. Firstly, it may be that, in a cohabiting couple acquiring, for example, a ‘buy to let’

property, one of the parties provided the capital, for whatever reason that may be, including

the other party doing the bulk of the childcare. This is of course specifically recognised in

Family law for couples in a marriage or civil partnership, 208 but there is no such provision for

cohabiting couples, so a requirement of financial outlay could perpetuate the inequity in the

current presumption. Secondly, such a requirement could lead to confusion. There may be

agreements of the “magnitude” of Pettitt v Pettitt 209 discussed above, which would obviously

satisfy the requirement, but what would the threshold be? In the bottle of wine in exchange

for dinner example, the host may have spent a not insignificant sum on dinner, but we would

not expect this to be enforceable through the courts.

c. Seriousness of the agreement

The notion of ‘seriousness’, whilst acknowledging the potential for subjectivity, is one which

features in the case law. Christandl notes that the requirement of intention has its roots in

Roman law, where a lack of seriousness obvious to both parties prevented the contract from

205
New Media Holding Company LLC v Ivan Kuznetsov [2016] EWHC 360 (QB) at [101].
206
Blue v Ashley EWHC 1928 (Comm) at [102].
207
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) at [97]
and [100].
208
Matrimonial Causes Act 1973 s25 (2)(f) the contributions which each of the parties has made or is likely in
the foreseeable future to make to the welfare of the family, including any contribution by looking after the
home or caring for the family.
209
Pettitt v Pettitt [1969] 2 W.L.R. 966.

34
coming into force 210. Seriousness will include the subject matter and is alluded to in the

case law, including LJ Atkin’s walk in Balfour and the free coin in Esso. 211 By focussing on

the seriousness and subject matter, rather than the individuals, the fact that the agreement

concerns routine household management or an everyday social arrangement is a strong

indicator that there is no ICLR. This, we suggest, will go some way to mitigating the

problematic connotations of the ‘domestic’ presumption as previously discussed, whilst

recognising that policy has role to play i.e. that there are agreements which we do not want

to be legally enforceable.

d. Overall context

Finally, consideration of overall context is suggested as a residual indicator. This could

include the nature of the relationship; the setting of the agreement, for example the pub in

Blue v Ashley 212, any previous dealings or prior contractual relationship as seen in New

Media Holdings 213 and Attrill 214; whether the agreement is executed or executory 215, and any

other considerations the court may consider relevant.

Sitting alongside the above is the overarching objective/reasonable person approach.

Freeman notes that although it seems that Atkin LJ in Balfour is imputing intention on what

might be expected from people in the Balfours’ situation, he does not explicitly put this into a

”reasonable spouses” context. 216 Had he done so, would the finding on intention have been

the same? For Ormrod J the fact that the agreement in Snelling v Snelling was drafted by

an “unsophisticated layman” was a key factor, and viewing an agreement in a family/social

setting through the lens of the reasonable person will, we suggest, assist with bringing the

210
G. Christandl in N Jansen, R Zimmerman, ‘Commentaries on European Contract Laws’ (Oxford 2018), 240.
211
Balfour v Balfour [1919] 2 KB 571, Esso Petroleum v Commissioners of Customs and Excise [1976] 1 W.L.R. 1.
212
Blue v Ashley [2017] EWHC 1928 (Comm).
213
New Media Holding Company LLC v Ivan Kuznetsov [2016] EWHC 360 (QB) at [100].
214
Dresdner Kleinwort Ltd v Attrill [2013] EWCA Civ 394, [2013] at [80].
215
Chitty, see note 3 above, notes the courts are reluctant to find lack of ICLR where there has been
substantial performance 2-171.
216
Freeman, note 22 above p.70.

35
question of intention up to date. It would also mean that family/social agreements would not

have the additional hurdle of having to show a certain level of formality. Freeman suggests,

as did Lord Denning MR in Gould, 217, that in respect of that agreement, whereby the

husband would pay a sum of maintenance as long as he had it, “[I]t is a fair suspicion that

reasonable people, certainly people who understood the lives of couples like the Goulds,

would have concluded that they had made a binding agreement.” 218

Discussing President of the Methodist Conference v Parfitt, Freeman notes that all the lay

members of the Employment Tribunal and Employment Appeal Tribunal decided in Parfitt’s

favour, whereas the lawyers, that is the legally qualified chairmen in the Tribunals and the

Court of Appeal judges, decided against him. Clearly, whilst recognising that a reasonable

person test is not a ‘silver bullet’, it has the advantages of adding a non-legal perspective

and of evolving with time to encompass changing social norms including language and

context.

In commercial cases where intention is disputed, the reasonable person test can encompass

the question of whether the ‘agreement’ made business and commercial sense 219, including

consideration of market practice. 220 Blue v Ashley held that ‘no reasonable business person

would have thought that a serious contractual offer was being made’ 221. In Moorgate, the

fact that the fee was ‘unusually large’ and that there would have been ‘no need’ to engage

additional advisory services, was indicative of lack of intention. 222 Similarly, in Athena

217
Gould v Gould [1970] 1 QB 571.
218
Freeman, note 22 above p.72.
219
Dacy Building Services Ltd v IDM Properties Ltd [2018] EWHC 178 (TCC) at [54] where the alleged
agreement was verging on the “commercially suicidal”.
220
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) at [92],
where the judge noted: “the absence of such an engagement letter or any written agreement is at odds with
the market practice”.
221
Blue v Ashley [2017] EWHC 1928 (Comm) at [88].
222
Moorgate Capital (Corporate Finance) Ltd v Sun European Partners LLP [2020] EWHC 593 (Comm) at [93]
and [98].

36
Brands Ltd v Superdrug, the court considered whether the agreement made ‘commercial

sense’ 223 and in Esso Petroleum, Glaisdale LJ refers to commercial advantage. 224

CONCLUSIONS

To sum up, our review of the case law has identified two problems with the existing ICLR

doctrine. Firstly, the boundaries between commercial and social agreements are becoming

increasingly blurred, with numerous cases not fitting into either presumption and the courts

abandoning the presumption/rebuttal model in favour of identifying factors/indicators to

assess intention. Secondly, the presumptions themselves are beset with problems.

As the law of contract changes to encompass the current realities of working practice, 225 why

should it not in the same way develop to reflect the infinite variety of agreements made in a

wide range of relationships and settings? The introduction of a fresh framework, through the

series of indicators, will enable the courts to assess intention and, perhaps more importantly,

to articulate the reasons for their findings in a more transparent way.

Writing in 1970, Hepple noted that it was open to the then House of Lords to review the post-

Balfour 226 cases and reject or modify the requirement of ICLR, noting however “that the

device of constructive “intention” is superficially attractive because it enables the courts to

223
Athena Brands Ltd v Superdrug Stores Plc [2019] EWHC 3503 (Comm) at [15].
224
The authors considered whether the subjective approach of the equitable remedy of rectification of
agreements in the absence of an antecedent contract as discussed in FSHC Group Holdings Ltd v GLAS Trust
Corpn Ltd [2019] EWCA Civ 1361, would be effective in the context of intention. Our present conclusion is that
the objective approach has the advantage of commercial certainty, as noted by Leggatt, LJ at [150], which we
feel outweighs the advantages of the subjective approach, effective though that is for the contexts discussed
in FSHC and the facts of that case itself. However, this would be an interesting area to explore in future
research.
225
See for example Law Commission report 386 Electronic Execution of Documents (2019)
https://www.lawcom.gov.uk/project/electronic-execution-of-documents/ (accessed 18 May 2020).
226
Balfour v Balfour [1919] 2 KB 571.

37
cloak policy in the mantle of private contractual autonomy.” 227 Some fifty years on from that,

and a century on from Balfour 228, we suggest that such a review of the doctrine would not

only be welcome, but is long overdue.

227
Hepple, note 8 above.
228
Balfour v Balfour [1919] 2 KB 571.

38