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Balfour v. Balfour (1918-19) All ER 860 (CA)

Personal Skill Development Activity

Law of Contract (1st semester)

Name – Upasana Tyagi

Class- BBA LLB (1A)

BALFOUR V. BALFOUR (1918-19) ALL ER 860 (CA) 2

FACTS

In 1915, Mr. Balfour, who was employed as a civil engineer, was posted in Ceylon, now Sri Lanka, while
his wife, Mrs. Balfour, stayed back in England due to health concerns. During this period of separation,
Mr. Balfour made an arrangement to send his wife £30 per month as financial support, which was
acknowledged as maintenance for her. However, their marriage faced strains, leading to a formal
separation. Following their separation, Mrs. Balfour initiated legal proceedings against her husband. She
argued that the £30 monthly payments were a result of a binding agreement between them and that Mr.
Balfour was legally obligated to continue these payments. Mrs. Balfour sought the court’s intervention to
enforce this alleged contract and claim the promised maintenance.
The central Issue before the court was whether the agreement between Mr. and Mrs. Balfour constituted
a legally binding contract. The court had to assess the nature of their agreement, considering the intent of
the parties involved and the context in which the agreement was made. The question hinged on whether
this agreement, made within the confines of marriage and family, held the legal weight of a contract,
implying a formal intention to create legal obligations. The Court of Appeal, in its judgment, took into
account the domestic and informal nature of the arrangement. The court held that agreements made
between spouses in domestic settings, especially those arising from social or familial relations, are
generally presumed not to be legally binding. The court emphasized the absence of an intention to create
legal relations in this particular case. Consequently, the court ruled that Mr. Balfour’s promise to pay £30
per month was a product of a domestic arrangement, lacking the essential intent to be legally enforceable.
As a result, Mrs. Balfour’s claim was dismissed, establishing a legal precedent that agreements made
within the context of family relationships, unless expressly proven otherwise, are presumed not to be
legally enforceable contracts under English law.

LEGAL ISSUES

1. Formation of a Valid Contract: The central question revolved around whether the agreement
between Mr. and Mrs. Balfour constituted a valid contract. To form a contract, there must be a
clear offer and acceptance, intention to create legal relations, and consideration. The court had to
delve into the specifics of their arrangement to ascertain if these essential elements were present.
BALFOUR V. BALFOUR (1918-19) ALL ER 860 (CA) 3

2. Intention to Create Legal Relations: A crucial aspect of contract law is the intention of the parties
to be legally bound. In this case, the court scrutinized whether Mr. Balfour’s promise to provide
£30 per month as maintenance payments demonstrated a genuine intention to enter into a legally
binding agreement. The court examined the context in which this promise was made, considering
the nature of their relationship as spouses.
3. Presumption against Domestic Agreements: The legal system operates with a presumption that
agreements made within domestic or family settings are not intended to be legally binding. The
court had to assess whether this presumption applied to the Balfours’ situation. This involved an
in-depth analysis of the social and familial context of their agreement and whether it transcended
the presumed non-binding nature of domestic arrangements.
4. Consideration and Formality: Consideration, which refers to something of value exchanged
between parties, is a fundamental element of a contract. The court examined whether the
maintenance payments provided by Mr. Balfour constituted valid consideration for a contract.
Additionally, the court considered whether the absence of a formal written agreement affected the
enforceability of the arrangement.
5. Evaluation of Domestic Arrangements: The court engaged in a nuanced evaluation of the
Balfours’ domestic situation. It assessed the level of formality and mutual understanding in their
agreement, taking into account the complexities of interpersonal relationships within a marriage.
The court had to decide if the circumstances surrounding their arrangement elevated it to the status
of a legally binding contract.

DECISION

Certainly, in the landmark case of **Balfour v. Balfour (1919) 2 KB 571 (CA)**, the Court of Appeal
rendered a comprehensive and detailed judgment that significantly influenced contract law. The court’s
decision was rooted in a meticulous analysis of the intricate legal issues and the specific context of the
Balfours’ agreement. The court meticulously examined the nature of the agreement between Mr. and Mrs.
Balfour. It acknowledged that for a contract to be valid, there must be a mutual intention to create legal
relations. The court delved into the social and domestic circumstances in which the agreement was made,
considering the relationship between the parties as husband and wife. It emphasized that agreements
between spouses, especially those of a domestic nature, are typically presumed to be informal and lacking
BALFOUR V. BALFOUR (1918-19) ALL ER 860 (CA) 4

the requisite intention to create legal obligations. Furthermore, the court took into account the absence of
any formalities or commercial elements in the agreement. There were no written documents or explicit
terms that indicated a legal contract. The court recognized the significance of these factors in determining
the intention of the parties. The judges also considered the concept of consideration, a fundamental
element of a contract. They evaluated whether there was valid consideration exchanged between the
parties. The court found that the maintenance payments made by Mr. Balfour, while reflecting a moral or
social duty, did not constitute consideration in the legal sense, as they were not provided in exchange for
something of value. Additionally, the court acknowledged the general legal principle that agreements made
within a domestic or family context are presumed not to be legally binding. This principle, often referred
to as the “domestic agreement presumption,” played a pivotal role in the court’s decision. The court
applied this presumption to the Balfours’ case, reinforcing its finding that the agreement lacked the
necessary intention to create legal relations. In light of these detailed considerations, the Court of Appeal
concluded that there was no enforceable contract between Mr. and Mrs. Balfour. Mrs. Balfour’s claim was
dismissed, establishing a significant legal precedent. The case underscored the importance of clear intent,
formalities, and consideration in the formation of contracts, particularly within the intimate and familial
spheres of life.

LAW POINT ANALYSIS

1. Intention to Create Legal Relations:
- Law Point: In contract law, a crucial element is the intention of the parties to create legal relations.
Without this intention, an agreement may lack the necessary legal enforceability.
- Application: The court extensively examined the context in which Mr. and Mrs. Balfour’s agreement
was made. It considered the emotional and social elements of their relationship, concluding that the
arrangement was more of a domestic understanding rather than a formal contract. The court emphasized
the absence of an intention to create legally binding relations, given the informal, familial, and
compassionate nature of the agreement.

2. Presumption against Domestic Agreements:

- Law Point: There exists a legal presumption against the enforceability of domestic agreements. Courts
presume that agreements made between family members lack the intent to create legal obligations.
BALFOUR V. BALFOUR (1918-19) ALL ER 860 (CA) 5

- Application: The court applied this presumption to the Balfours’ case, highlighting that agreements
within the family, especially between spouses, are presumed not to be legally binding. The absence of
explicit language indicating legal intent strengthened this presumption.

3. Consideration and Mutuality of Obligation:

- Law Point: For a contract to be valid, there must be consideration – something of value exchanged
between the parties. Additionally, there must be mutuality of obligation, indicating a reciprocal
relationship of promises.
- Application: The court assessed whether there was valid consideration in the Balfours’ agreement. It
found that the payments made by Mr. Balfour lacked the element of reciprocity. Mrs. Balfour did not
promise anything in return for the maintenance payments, indicating a lack of mutuality and rendering the
arrangement non-contractual in nature.

4. Absence of Formality and Express Terms:

- Law Point: While formal written agreements are not always necessary, the absence of express terms
and formalities can indicate the absence of legal intent.
- Application: The court noted the absence of any formal written contract between the parties. The lack
of specific terms and formalities reinforced the court’s finding that there was no explicit intention to create
a legally binding agreement.

5. Moral and Social Considerations:

- Law Point: Courts sometimes consider moral and social obligations, especially in familial
relationships. However, these moral duties do not automatically translate into legal obligations.
- Application: The court acknowledged Mr. Balfour’s moral obligation to support his wife. Nevertheless,
it distinguished between moral duties and legally binding contracts, highlighting that the former does not
necessarily imply the latter.

In the case of Balfour v. Balfour, which is a landmark judgment related to the Indian Contract Act, 1872,
the court held that agreements made in a domestic or social setting, where parties do not intend to create
legal relations, are not enforceable contracts. This means that spouses living together in a marital
relationship generally do not intend to create legal obligations towards each other in their day-to-day
BALFOUR V. BALFOUR (1918-19) ALL ER 860 (CA) 6

interactions. The specific sections of the Indian Contract Act, 1872, relevant to this case are not explicitly
mentioned in the judgment. However, the case is often cited in the context of Section 10 of the Indian
Contract Act, which defines what constitutes a valid contract. In situations where parties do not intend to
create legal relations, there is no valid offer and acceptance as required by Section 10, and therefore, no
enforceable contract is formed.

Please note that while Balfour v. Balfour is a significant case in contract law, the judgment did not
explicitly refer to specific sections of the Indian Contract Act, 1872.