DETAILS OF THE CASE

NAME OF THE CASE: Balfour vs Balfour

CITATION: [1919] 2 KB 571

DECIDED : 25 June 1919

COURT : Court of Appeal 

JUDGES : Lord Justice Atkins 

FACTS

Mr Balfour ( the defendant ) worked in Ceylon as an Engineer . He and his wife ( the plaintiff)  decided to visit England during the defendant’s leave. During their visit, the plaintiff developed a condition called Rheumatoid Arthritis . The doctor advised the plaintiff to continue staying in England as the weather in Ceylon wasn’t favourable for her condition and hence would lead deterioration to her health. Before leaving for Ceylon, the defendant had made an oral promise to the plaintiff stating that he would pay her 30 euros per month until he returned. Over time the relationship of the plaintiff and the defendant fell apart and the monthly payments were stopped. After the divorce, the plaintiff in March 1918 , sued the defendant for conjugal rights and alimony money equal to that amount. 

PROCEDURAL HISTORY

In the King’s Bench Division presided by Justice Sargant, it was held that the  husband was under an obligation to support his wife and a valid contract exists between them . The lower court decided in favour of the plaintiff and said that the defendant’s promise to send money was enforceable and valid . The consent to this arrangement of  was a valid consideration to constitute a valid contract between them. The plaintiff got a decree nisi and later in December she obtained an order for alimony. The lower court found the contract binding to which the defendant appealed .

ISSUES

ISSUE 1:

• Whether an oral agreement made between husband and wife is enforceable under any circumstances ?

ISSUE 2:

• Whether the intention between both the parties is enough to make an agreement a valid contract ?

ISSUE 3;

• What are the terms under which a judge could fail to impose a spousal agreement? 

RULES

BASIC PRINCIPLES OF ENGLISH CONTRACT LAW:

• 1.  : An agreement, even if supported by consideration, is not binding as a contract if it was made without an intention to create legal intentions. That is, the parties must intend their agreement to be legally binding. 

• 2. : Many social arrangements do not amount to contracts because they are not intended to be legally binding. Equally, many domestic arrangements, such as between husband and wife, or between parent and child, lack force because the parties did not intend them to have legal consequences.

• 3. : In common law, a promise is not, as a general rule, binding as a contract unless it is supported by consideration (or it is made as a deed). Consideration is “something of value” which is given for a promise and is required in order to make the promise enforceable as a contract. This is traditionally either some detriment to the promisee (in that he may give value) and/or some benefit to the promisor (in that he may receive value). 

MARRIED WOMAN PROPERTYACT , 1874 :

• SECTION IV (7) : Married women may take legal proceedings. —A married woman may maintain a suit in her own name for the recovery of property of any description which, by force of the said Indian Succession Act, 18652 (10 of 1865) or of this Act, is her separate property; and she shall have, in her own name, the same remedies, both civil and criminal, against all persons, for the protection and security of such property, as is she were unmarried, and she shall be liable to such suits, processes and orders in respect of such property as she would be liable to if she were unmarried. 

ANALYSIS

In the King’s Bench Division it was held that the Mrs Balfour’s consent was a sufficient consideration for the agreement to be a valid contract but Sargent J’s decision was reversed when the case was appealed. It was held that it was not a valid contract due to the consideration being invalid. 

“The consideration for the promise by the husband to pay the allowance was that she gave up her right to pledge his credit. The husband has a right to withdraw the authority to pledge his credit. The wife’s consent, therefore, cannot be treated as consideration to support such a contract as this”

Duke L.J held as above, on account of the fact that a wife can pledge her husband’s credit only when they are living apart due to husband’s misconduct and has left without adequate means or due to mutual consent and the husband forgets to pay the allowance, which was neither of the case hence it’s not valid consideration.

 Moving on Sir Atkin L.J held the following:

“The ordinary example is where two parties agree to take a walk together, or where there is an offer and an acceptance of hospitality. Nobody would suggest in ordinary circumstances that those agreements result in what we know as a contract, and one of the most usual forms of agreement which does not constitute a contract appears to me to be the arrangements which are made between husband and wife”^[1]

The above lines clearly show how an mere domestic agreement between an husband and wife cannot amount to a valid contract because first, there was no intention to enter into a legal contract, two, a mere verbal agreement cannot be a valid contract as it is not legally binding in any form. It was a mere domestic agreement. As Sir Atkin L.J mentioned if these kind of agreements resulted into a valid contract, the cases would have multiplied a hundredfold. 

CONCLUSION

From Balfour vs Balfour we gained a new perspective to contract validation. In common law , a contract is valid and enforceable only when the parties intend to create legal relations .

Weather a  party intends to create a legal relation or not is determined by scrutinising the given circumstances at the time of the contract being made . It does not matter if a promise is made or not, it is the duty of the party to uphold it to the fullest capability. Now the domestic agreement states that a promise made within the family does not amount to a contract until and unless both the parties intend to enter into a legal obligation . Judges now can apply the floodgate theory for cases ahead. 

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