BALFOUR VS BALFOUR (1919) 2 KB 571

BALFOUR VS BALFOUR (1919) 2 KB 571

Citation	(1919)2KB 571
Date of Judgment	25TH JUNE 1919
Court	Court of Appeal of England and Wales
Plaintiff	Mr. Balfour
Respondent	Mrs. Balfour
Bench	Atkin, Warrington, and Duke J

BACKGROUND 

The case of Balfour v. Balfour holds significant importance in relation to the aspect of contract law. This legal precedent established that even if an agreement could potentially meet the requirements of a valid contract under ordinary circumstances, it may not be deemed legally binding if there is no intention to create legal relations. This exception particularly applies to agreements made within the domestic realm between spouses. The court in Balfour v. Balfour recognized that not all agreements between married couples automatically possess the intention to create legal relations. In situations where the agreement arises within the context of the spouses’ domestic relationship, it may lack the necessary intent to be enforceable as a valid contract. For a contract to be deemed valid under the Indian Contract Act, of 1872, the presence of an intention to create legal relations is of utmost importance. This means that the parties involved must demonstrate a genuine desire and understanding that their agreement will be legally enforceable. Section 10 of the Act explicitly states that agreements rooted in domestic or social considerations do not meet this requirement and thus cannot be regarded as valid contracts.

The underlying principle behind this provision is to ensure that contracts are entered into with a serious intent to be bound by legal obligations. It recognizes that certain agreements made within personal or social relationships, driven by love, trust, or goodwill, are not intended to have legal consequences. Instead, such agreements are based on mutual understanding and informal arrangements, allowing individuals to interact without the constraints of legal enforceability. By differentiating between contracts and domestic/social agreements, the law acknowledges the distinct nature of personal relationships and respects the autonomy and freedom individuals have to make informal promises or arrangements within those relationships. This approach allows for flexibility and avoids unnecessary legal intervention in matters that are best resolved through non-legal means. Therefore, for a contract to be valid, the intention of the parties involved must be focused on creating legally binding obligations. Agreements based on domestic or social considerations, where the parties do not possess this intention, fall outside the scope of valid contracts under the Indian Contract Act.

FACTS OF THE CASE

Mr. Balfour and Mrs. Balfour, a married couple from Ceylon (Sri Lanka), embarked on a vacation to England in 1915. Tragically, during their time abroad, Mrs. Balfour fell seriously ill and required immediate medical attention. Considering the situation, they reached a mutual agreement: Mr. Balfour would return to Ceylon while Mrs. Balfour stayed in England to recover from her illness. As part of their agreement, it was decided that Mr. Balfour would provide Mrs. Balfour with a monthly maintenance payment of 30 pounds during her stay in England until her health improved or she was able to return to Ceylon. This understanding was established when their relationship was in a harmonious state, free from any strains or conflicts.

However, as time passed, their relationship gradually deteriorated, resulting in Mr. Balfour failing to fulfill his financial obligations towards Mrs. Balfour. Determined to enforce the agreement they had made, Mrs. Balfour chose to take legal action and sought resolution through the court system. In 1918, the situation worsened when Mr. Balfour wrote a letter to his wife, indicating his desire for a permanent separation. Eventually, they legally separated and obtained a divorce. In 1918, Mrs. Balfour initiated legal proceedings against Mr. Balfour for his non-payment of the maintenance amount he was obligated to provide, as stipulated in the court of law.

ISSUES 

1. Was there any intention on the part of Mr. Balfour to enter into an agreement with his wife, Mrs. Balfour?
2. Does the agreement between Mr. and Mrs. Balfour possess any validity?
3. Is the contract between a husband and wife enforceable in a court of law?

Procedural History Of The Case

Following Mrs. Balfour’s initial legal action to seek maintenance, a judge from the King’s Bench Division, Justice Sargant, presided over the case and ruled that Mr. Balfour was indeed liable and obligated to provide financial support to his wife. The court concluded that a valid contract existed between Mr. and Mrs. Balfour, leading to a favorable judgment for the plaintiff (Mrs. Balfour) and against the defendant (Mr. Balfour). The lower court held that the defendant’s promise to provide maintenance was enforceable.

The consideration involved in the agreement, which entailed the monthly transfer of a specific sum of money, was deemed lawful and created binding obligations. Consequently, in July 1919, Mrs. Balfour received the decree nisi, and later in December, she obtained an order for alimony. The lower court recognized and upheld the binding nature of the contract. However, Mr. Balfour decided to appeal the decision to a higher court.

ARGUMENT 

Contention by the Appellant (Mr. Balfour): The agreement between Mr. Balfour and Mrs. Balfour was purely of a domestic nature and lacks any legal enforceability. Furthermore, Mr. Balfour did not possess any intention to enter into a legally binding agreement.

The contention by the Respondent (Mrs. Balfour): The husband bears the obligation to provide maintenance to Mrs. Balfour because he voluntarily entered into the domestic agreement, promising to pay her 30 pounds as support, as a condition for her to stay in England.

JUDGEMENT 

 Lord Justice Atkin, in his ruling, determined that the nature of the agreement between Mr. and Mrs. Balfour was entirely domestic in character. He emphasized that when spouses enter into an agreement, their intention is not typically focused on creating a legal relationship. For an agreement to be enforceable in a court of law, both parties must have the intention to establish a legal relationship at the time of entering into the agreement. Furthermore, the court generally does not intervene or consider domestic agreements between spouses that are part of their daily lives. Such agreements are viewed as falling outside the realm of enforceable contracts. In essence, the ruling concluded that the agreement in question did not meet the criteria of a valid contract. It was deemed to be purely domestic in nature and lacking the necessary intention to create a legal relationship, thereby rendering it unenforceable in a court of law. As mentioned previously, the agreement between Mr. Balfour and Mrs. Balfour lacked legal enforceability, as agreements made within personal family relationships are not recognized under contract law. Even if spouses make arrangements or commitments regarding finances or monetary benefits, these agreements are typically not considered legally binding. Generally, such arrangements are based on personal or household matters and lack legal intent.

The Court of Appeal unanimously ruled that no enforceable agreement existed between Mr. Balfour and Mrs. Balfour. Consequently, Mr. Balfour was allowed relief from any obligations arising from the agreement. The central principle of the case was that for a contract to be valid, there must be an intention on the part of both parties to create a legal relationship. The determination of whether such intention exists is based on an examination of the surrounding circumstances at the time the contract was formed.

In summary, the court’s decision highlighted the significance of the intention to create a legal relationship in validating a contract. In this case, it was concluded that the parties did not have the requisite intention, leading to the agreement being considered non-binding.

REFERENCES

1. Hedley, S. (1985) Keeping contract in its place–Balfour v Balfour and the enforceability of informal agreements, Oxford Journal of legal studies, 5(3), pp. 391 415.
2. Book referred:

Chapter, “Contracting in the Haven: Balfour and Balfour Revisited” by M.D.A. Freeman from the book Exploring the Boundaries of Contracts by Roger Halson, 1996.

This Article is written by Devyani Kapse of ILS Law College, Pune. Intern at Legal Vidhya.