THE CASE'S FACTS

In this scenario, Mr. Balfour1 is the plaintiff. He used to reside in Ceylon, Sri Lanka, with his

child. They visited England during his summer holidays in 1915. His wife became sick and

needed medical assistance. Her psychiatrist recommended her to remain in England. They agreed

that Mrs. Balfour would stay in England before her husband returned to Ceylon (Sri Lanka), and

that Mr. Balfour would compensate her £30 a month until he did. This agreement was reached

while their partnership was in good standing; however, the relationship subsequently

deteriorated.

He wrote her after his return to Ceylon, saying that it would be easier if their split were

irreversible. Mrs. Balfour prosecuted him for restoration of her conjugal privileges and alimony

equivalent to the sums her spouse had promised to give when the parties separated and the

question of whether the arrangement was enforceable emerged. Mrs. Balfour accused him in

March 1918 for failure to allow the regular £30 instalments.2

In 1919, the case of Balfour v Balfour sparked the idea of establishing a legal ties doctrine in

contract law.

PROCEDURAL HISTORY

An extra judge of the King's Bench Division, presided over by Justice Sargant, ruled that the

husband is obliged to help his wife and that the husband and wife have a legal contract. The

lower court found in favour of the complainant, claiming that the defendant's offer to give money

was true. The wife's agreement to the monthly swap deal was a sufficient factor to create a

legally binding relationship between the parties. She was granted a judgement nisi in July and an

1
[1919] 2 K.B. 571
2
Saprai P, “Balfour V Balfour and the Separation of Contract and Promise” (2017) 37 Legal Studies 468.
alimony order in December. Mr. Balfour challenged the lower court's ruling that the deal was

binding

ISSUES OF THE CASE

1. Is it appropriate for the parties' intentions to be legally binding in order for a contract to

be enforceable?

2. In what cases would a judge refuse to uphold a spouse's agreement?

HELD

1. In order for a contract to be enforceable, all sides must wish for it to be legally binding.

2. Agreements for partners involving common life may not be enforced by the judge.

RULE

The rule that applies in this situation is regarding the difference between a contract and a

commitment, and whether a marital arrangement has any legitimate contractual power to be

implemented as a contract in a court of law. Mrs. Balfour was appealing in contract, alleging that

Mr. Balfour owed her maintenance not because he had married her, but that he had agreed to do

so... Since this situation contained a husband and wife, this relationship is strictly a domestic or

social one. In order to execute any arrangement as a contract, it must include the following basic

elements:

 Consideration

 The legal intent to enter into a contract.

These types of deals aren't actually arrangements at all. Another law is that the court considers

which arrangement would end in a marriage contract between the partners.

 ANALYSIS

Sargant, J., ruled that Mrs. Balfour's agreement was adequate consideration to make the contract

enforceable at first place, and the defendant appealed. However, a bench comprising Warrington

LJ, Duke LJ, and Atkin LJ ruled in the appellate court that the contract was not enforceable.

Warrington LJ and Duke LJ did so largely because they had concerns regarding the wife's

authenticity. To resolve the case, Atkin LJ relied on the intention to establish legal relations

theory, a doctrine that had previously only been used in textbooks.3

The Doctrine may be said to be focused on public policy; that is, the rule of contract does not

interfere in domestic cases as a matter of policy so the courts will be swamped with frivolous

domestic conflicts.

Mutual promises made in the form of an ordinary domestic partnership between husband and

wife, according to the Court, do not normally result in a legally binding contract since they are

not intended to be legally binding. The Court did admit, however, that there might be times

where a legally binding relationship between a husband and wife is essential. The situation is

noteworthy, as shown by the factual argument and verdict. Mrs. Balfour's argument was focused

on arrangements rather than her conjugal privilege. This was an unusual argument, and the

lordship's decision demonstrates their reluctance to expand the rule of contacts into the sphere of

matrimonial privileges and responsibilities, where it had previously served only a minor role. 4

The prerequisite of "purpose to establish lawful partnership" gained popularity as a result of Lord

Atkin's decision. An animus contrahendi is a term used to describe the intention. This is a real,

not a civil, inference, as Salmon LJ clarified in the later case Jones v Padavatton 5.

3
S Leake The Elements of the Law of Contracts (London: Stevens and Sons, 1st edn, 1867) p 9;
4
Husband and wife could not contract at all before the Married Women’s Property Act, 1882.
5
[1969] 2 All ER 616 at 621.
Objectivity, not subjectivity, is used to determine contractual meaning. What counts is what a

normal individual might consider and intend to do in a particular situation. Apart from the

present situation, it is evident from a number of decisions (Shadwellv.Shadwell 6, PettittV.Pettitt7)

that the presumption of desire to form a civil partnership is mandatory.

It is still uncertain if the condition of intent to contract is valid in India under the explicit

provisions of the Indian Contract Act, 1872.

REMARKS

“The Balfour deal was not a legally enforceable lease, but rather a routine domestic

arrangement. Mrs. Balfour will not appeal over the supposed violation of it because there was no

attempt to establish legal ties. The Court of Appeal overturned the lower court's decision.”

Whatever the precise status of Atkin LJ's presumption, which has been a source of debate, 8its

impact has been to perpetuate the impression that contractual and personal ties, including Venice

and Belmont, are separate realms(Merchant of Venice, distinction between the worlds of trade

and intimacy).

The fact that the court's rationale differs renders it impossible to determine the case's exact ratio.

Now we may consider the scope of the presumption that parties to domestic agreements do not

want to create legal relationships, the factors that courts have used to rebut the presumption, the

rationale for the presumption, and finally, the relationship between the doctrine of intention to

create legal relations and the doctrine of consideration9 throughout the domestic context.

6
(1860) 9 C.B. (n.s.) 159.
7
(1969) 2 WLR 966.
8
M Freeman ‘Contracting in the Haven: Balfour v Balfour Revisited’ in R Halson (ed) Exploring the Boundaries of
Contract (Farnham: Ashgate/Dartmouth, 1996) p 68 at p 70;
9
Gulati B, “Intention to Create Legal Relations: A Contractual Necessity or An Illusory Concept” (2011) 02 Beijing
Law Review 127.
 JUDICIAL DECESIONS

The parties in this situation were Mr. and Mrs. Spellman. They used the hire purchasing scheme

to purchase a vehicle in the hopes of changing their marital life (for they were going through

some problems). Mr Spellman scribbled Mrs Spellman's name in the registration book, causing

her to ask if the vehicle belonged to her. In the affirmative, he responded. Mr Spellman, though,

took the car with him after three weeks (but left the registration book with his wife) because their

marriage was failing. Mr Spellman was not able to separate from the possession of the vehicle,

nor was he permitted to delegate the value of the hire purchasing arrangement.

Mrs Spellman was found to have no rights to the vehicle or to the benefits of the hire-purchase

deal. This was due to the assumption that the arrangement was deemed to be a domestic one with

no "intent to establish legal ties." This lawsuit focused on the specifics of the hire-purchase

agreement rather than the fact that it was a domestic agreement. Even though Balfour v. Balfour

does not seem to be expressly quoted, the theory developed in that case was repeated in this case

for the same reason.

JONES V. PADAVATTON

Mrs Violet Jones and her daughter, Mrs Ruby Padavatton, were the defendants in this lawsuit. In

this situation, the two of them agreed that Mrs Jones would cover her daughter's maintenance if

she went to England to study for the bar. They later changed the deal so that the mother would

give her daughter a house to reside in whilst she was studying. When the house's ownership was

called into doubt, Mrs Jones filed an appeal.

Mrs Jones' appeal was supported by the case of Balfour v. Balfour, in which she maintained that

the relationship was between family members and that she had no intention of creating civil ties,

so she was entitled to custody of the property. She further claimed that even though the Court

found the agreement to be true, the provisions were too ambiguous to draw any conclusions.

Mrs Padavatton maintained that the agreement was a legitimate contract with the purpose of

establishing legal ties. She also mentioned that preparing for the Bar was part of the contract's

evaluation.

Mrs Jones was victorious in her appeal. Although they came to the same decision, the Judges –

Salmon LJ and Atkinson LJ – had differing rationales. Salmon LJ addressed two main factors:

first, whether there was an attempt to develop legal ties, and second, whether the provisions of

the so-called contract were necessary to be enforceable or not. Salmon came to the realisation

that there was no intention of establishing legal bonds, and that the contract's conditions were too

unclear. Atkinson LJ considers three main arguments: one, whether there was an attempt to

establish legal connections between the parties, two, whether the mother really chose to build

legal relations in order to help her baby, and three, if the daughter ever found her finishing her

education to be a contractual obligation, equivalent to Salmon. According to Atkinson LJ, there

was no attempt to develop legal links because the daughter appeared to be offended when her

mother sued her, which was adequate justification. He goes on to state that neither the mother

nor the daughter had expected any problems or legal entanglements.

The following situations are related in that they deal with the purpose to establish legitimate

relationships that do not yet occur (within family arrangements, in particular).

 MERRITT V. MERRITT

The parties became married in 1941 in this situation. Their residence was a joint enterprise.

When Mr Merritt left the matrimonial home in 1966 to reside with another wife, they owed 180

GBP on the property. As a result, he promised to compensate Mrs Merritt 40 GBP per month to

cover her mortgage payments. Mr Merritt then promised to move his portion of the property to

her after any of the payments were received. He has signed a statement stating this. Mr Merritt

lodged an appeal after Mrs Merritt obtained the house in her honour.

Mr Merritt said that his agreement with his wife was purely domestic in nature. There were no

plans to establish legal ties, because there was no deal. He further claimed that the deal should

not be considered a contract because Mrs Merritt refused to give sufficient consideration.

Mrs Merritt stated that there was an attempt to develop legal links. She argued that paying all of

the mortgage-related liabilities amounted to consideration.

Mrs Merritt was effective in her case. The court ruled that since the pair was in the midst of

divorcing, the principle of "intention to establish legitimate ties" did not apply, and that paying

off the debt constituted concern, and therefore the arrangement was legitimate.

RECENT TRENDS

The concept of desire to establish legal ties was raised in the Australian case of Ermogenous v.

Greek Orthodox Community of SA Inc. Archbishop Ermogenous lodged this lawsuit, alleging

that he was not compensated for any of the leaves he had accrued. Many presumptions were

found to have changed the judgement of the Full Court of the Supreme Court of South Africa,

where the decision was first made. The High Court ruled in favour of the Greek Orthodox
Community, claiming that no legal ties were intended and that Ermogenous was not entitled to

the capital.

The appellant in Baird Textile Holdings Ltd v. Marks & Spencer plc had been the defendant's

provider for more than three decades before the defendant terminated the contract. The

complainant then sued the defendant, but because there was no direct arrangement, the Judge

ruled in favour of Marks and Spencer. Though the principle of desire to establish legal ties is not

explicitly expressed in this situation, it is inferred that there is no such purpose and, as a result,

no contract.

There has long been controversy about whether the principle of purpose to establish legal ties

(along with bid, approval, and consideration) can be considered an integral ingredient or not.

One side of the debate claims that this definition is fictitious. The opposing viewpoint claims that

this principle is more critical than consideration. The four nations, the United States, the United

Kingdom, Australia, and New Zealand, tend to have three separate views about whether this

definition can be used or omitted as an integral part of contract law.

CONCLUSION

In the case of Balfour v Balfour, the judges' opinion is distorted by strongly rooted patriarchal

and conventional marriage views. The decision was biassed toward women who were financially

dependent on their husbands who had no contracting freedom since they were not deemed part of

the commercial domain. To discern a guarantee from a contract, a court of law deemed all

assurances in a marital relationship to be false promises, providing a vehicle for ruling parties to

manipulate others at the bottom of the social ladder. The court of law has ironically locked the

doors for those who were the most oppressed in the private sector to keep the floodgates from
opening of limitless litigations. The development of a new doctrine to define the parties' purpose

is impossible since the parties' intention is inferred while there is a bargain, making the doctrine

irrelevant. The theory of "intention to establish legal relations" not only limits the reach of

contract law, it also infringes on the cardinal concept of law, the right to rights.

The author attempted to analyse the relevance of the principle of purpose to establish legal ties

by a case study of Balfour v. Balfour. This was one of the first instances to demonstrate the

relevance of this definition. This definition has been examined in the context of family

agreements (in this project), where it must be shown that any relationship the parties had was

contractual in nature. The author has often looked at situations that address this definition and

noticed that each situation is special – there is no one-size-fits-all approach. When it comes to

the assertion that the desire to establish legal ties is an important ingredient, the author agrees

with the Australian position. This is an important event, and the result is unlikely to improve in

the immediate future.