Law of contract BALFOUR vs. BALFOUR  2K. B. 571 TABLE OF CONTENTS 1. LIST OF ABBREVIATIONS 2. LIST OF CASES 3. FACTS OF THE CASE 4. ISSUES INVOLVED 5. CONTENTIONS 6. JUDGMENT 7. LAW POINT 8. BIBLIOGRAPHY LIST OF ABBREVIATIONS I. L. J. : Lord Justice II. AIR : All India Reporter III. QBD : Queen’s Bench Division IV. CBNS : Common Bench Report (New Series) V. AER :All England Reporter
VI. CLR : Commonwealth Law Reports LIST OF CASES Cases referred to by the court of appeal in Balfour vs. Balfour: I. Eastland vs. Burchell (1878),3 Q. B. D. 432 II. Jolly vs. Rees (1864),15 C. B. N. S. 628 III. Debenham vs. Mellon (1880),6 App. Cas. 24 Cases having the same law point as Balfour vs. Balfour: I. Rose and Frank Co. vs. Crompton & Bros. Ltd. (1925) A. C. 445 II. Jones vs. Padavatton (1969) All E. R. 616 III. Meritt vs. Meritt (1970) 2 All E. R. 760 IV. S. V. R. Mudaliar vs. Rajababu AIR 1995 SC 1607. Some recent case laws having the same law point:
I. Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Facts Archbishop Ermogenous made a claim for payments he thought due for annual and long service leave from the Greek Orthodox Community. He succeeded at first instance but the Full Court of the Supreme Court of SA found there was no intention to create legal relations between the parties. An appeal was made to the High Court. II. EDMONDS v LAWSON (2000) FACTS OF THE CASE After their marriage in August, 1900, the parties went to Ceylon, where the husband had a government post.
In November, 1915, the wife came to England together with the husband, who was on leave. they both intended to return to Ceylon . In August,1916,the husband’s leave expired and he had to return to Ceylon ,but the wife ,on the advice of her doctor ,was to remain in England. On August 8, 1916, when the husband was about to sail, the wife alleged that the parties enter into an oral contract whereby the husband agreed to make an allowance of ? 30 a month. The parties had not at that time agreed to live apart, but did so subsequently when differences arose between them.
An action was taken by the wife against the husband to recover money which she claimed was due to her under the agreement, the alleged consideration for that agreement being a promise by her to support herself without calling upon him. ISSUES INVOLVED * Was there any legally enforceable contract? * Was there any intention to enter into a legal relationship? CONTENTIONS PLAINTIFF: In this case the wife said: “In august 1916, my husband’s leave was up . I was suffering from rheumatoid arthritis. My doctor advised my staying in England for some months, and not to go out till Nov. . I booked a passage for next sailing day in September. On august 8 my husband sailed. He gave me a cheque from august 8 to august 31 for 24 pounds, and promised to give me 30 pounds per month till I joined him in Ceylon. ”She also showed some letters about which she said: “My husband and I wrote the figures together on august 8 and 34 pounds were shown. Afterwards he said 30 pounds. ” She wanted to recover money from her husband. DEFENDANT: The lower court entered judgment in favor of the plaintiff and held that the defendant’s promise to send money was enforceable.
The court held that Mrs. Balfour’s consent was sufficient consideration to render the contract enforceable and the defendant appealed. JUDGEMENT At first instance, Sargant, J. , who was sitting as an additional judge of the King’s Bench Division took into account the points that the wife in this case sued her husband claiming that her husband had agreed to give her an allowance of ? 30 per month which he failed to give, she claimed that there was a binding legal contract and the husband shall in consideration of a promise by the wife pay her the sum of ? 0 a month . Sargant J. held that there was a binding agreement and gave the descion in the favor of the wife after this an appeal was filed by the husband. Warrington,L. J. a judge in the court of appeal noted that there was a valid consideration in this case and said that : “It seems to me on these letters that there was a definite bargain between the husband and the wife under which ,while the husband was in India and in a sufficient position and the wife was in England living separate from him ,she should be paid a definite sum of ? 0 a month ,and that agreement was made when the husband retuned to Ceylon ,and was reaffirmed on at least two occasions after unhappy differences had shown themselves ,at any rate on the part of the husband ,and when it was probable that their separation might last for some time. ” Then he proceeded by saying that there was not exactly a valid contract because this agreement continued because of the circumstances which arose and this agreement cannot be termed as a legal contract because the intention to enter into a legal relation is missing.
He observed that it was quite plain that no such contract was made in express terms, and there wasn’t any bargain on the part of the wife at all. All that took place was this; the two parties met in a friendly way and discussed what would be necessary for the support of the wife while she was in England,there wasn’t any proof that the wife wanted the sum of ? 30 as a compensation or in the satisfaction of the obligations of the husband towards her to maintain her. He said that “the husband expressed his intention to make the payment, and he was bound in honour to continue it so long as he was in a position to do so.
The wife on the other hand, as far as I can see, made no bargain at all. ”He concluded by saying that the judgment made by Sargant, J. , was wrong and the appeal should be allowed. DUKE,L. J. another judge in the court of appeal agreed with Warrington,L. J. and said that the only question in this case is whether the promise of the husband to the wife ,that while she was living absent from him he will make her a periodical allowance, is a promise which involves in law consideration on the part of the wife sufficient to convert the promise into an agreement.
He said that according to him there wasn’t any legally enforceable contract and the basis of this agreement was the relationship of husband and wife and the proposition that the mutual promises made in the ordinary domestic relationship of husband and wife of necessity gives cause for action on a contract seems to go to the root of the relationship .
He concluded by saying “I think that in point of principle there is no foundation for the claim which is made here ,and I am satisfied on the question of fact that there was no consideration moving from the husband to the wife or promise by the husband to the wife which was sufficient to sustain this action founded merely on contract . In my view ,the appeal must be allowed. ” ATKIN,L. J. lso supported the judgment of the other two judges and said that in the arrangements between husband and wife mutual promises are present but there is no consideration which is necessary for a legally enforceable contract, in addition to this the intention to be attended by legal consequences is also absent. Such cases can’t be sued upon because the parties in the inception of the arrangement never intended that they should be sued upon. He said : “I think that the parol evidences upon which the contract turns does not establish a contract .
I think that the written evidences don’t evidence a contract . For this reason I think that the judgment of the learned judge in the court below was wrong ,and that this appeal should be allowed. LAW POINT The law point in this case is: Intention to create legal relationship. Intention to create legal relations is an essential element for creation of a contract. Intention to create legal relations is defined as an intention to enter a legally binding agreement or contract. It consists of readiness of a party to accept the legal sequences of having entered into an agreement.
Intention to create legal relations is a motion of every contracting party must have the necessary intention to enter into a legally binding contract. Promise in the case of social engagements is generally without an intention to create a legal relationship. Such an agreement therefore, cannot be considered to be a contract. Thus an agreement to go for a walk ,to go to a movie, to play some game, or entertain another person with with a dinner, cannot be enforced in a court of law.
Sometimes the parties may expressly mention that it is not a formal or legal agreement, whereas in some other cases such an intention could be presumed from their agreement. Under UK law, an agreement supported by consideration is not enough to create a legally binding contract; the parties must also have an intention to create legal relations. Often, the intention to create legal relations is expressly stated by the contracting parties. In other situations, the law will readily imply the intention, because of the nature of the commercial dealings between the parties.
Generally it is assumed that in social and domestic type of agreements this type of intention is absent, but parties do intend to create legal relations in commercial agreements. It is assumed that this doctrine was not clearly established until 1919. Alternatively, it can be said that the Doctrine is based upon public policy; that is to say that, as a matter of policy, the law of contract ought not to intervene in domestic situations because the courts would then be swamped by trifling domestic disputes.
The test to know the intention of the parties is objective and not subjective merely because the promisor contends that there was no intention to create legal obligation would not exempt him from liability. It may be noted that although in the case of close relationship there may be generally no intention to create legal relationship but there is nothing which prevents these persons from agreeing to be bound by their promises thus if an arrangement clearly shows an intention to create legal relationship the parties become bound thereby.
It is still an open question whether in the express provisions in the Indian Contract Act ,1872,the requirement of intention to contract is applicable in India. BIBLIOGRAPHY A. PRIMARY SOURCE [1918-19] All E. R. Rep. B. SECONDARY SOURCE Indian Contract Act –R. K. Bangia C. OTHER SOURCES www. indlaw. com www. indiankanoon. org http://www. australiancontractlaw. com