Balfour v. Balfour is a climacteric case in contract law which pioneered the doctrine of ‘Intentions to Create Legal Relations’.
Mrs. Balfour is the plaintiff and Mr. Balfour is the defendant in the present case. Both the husband and wife went to England together in 1915, but plaintiff had to stay back due to her medical condition on doctor’s advice. However, before returning to Ceylon, he had promised to pay £30 a month in consideration of her agreeing to support herself without calling him for further maintenance. The husband failed to fulfil the promise due to which the plaintiff sued the defendant. Judge Charles Sergeant held in favour of the plaintiff stating that the husband was under an obligation to support his wife. The husband then appealed in the Court of Appeal in which the judgement is given by LJ Warrington, LJ Duke and LJ Atkin in favour of the husband.
The judgement is given on key issues like whether the domestic agreements fall into the jurisdiction of Contract Law, whether there was an intention to create legal relation between the plaintiff and the defendant and whether there was a valid contract between the plaintiff and the defendant. It was held that the alleged agreement did not constitute a legal contract but was only a domestic promise which cannot be sued upon. Mutual promises which are made in a domestic relationship of husband and wife do not necessarily give a cause of action in a contract. This case established the key difference between a contract and a promise debate. Due to this debate, the doctrine of intention to create legal relations was corroborated.
The debate initiating the difference between a contract and a promise is introduced by LJ Warrington in the case. He analyses whether there could be a valid contract formed from the facts of the case and whether the parties intended to make a bargain which could be enforced in law. He tried to find a contract from the position of the parties. If the contract was implied on the part of the wife, then she should be content with £30 while the husband was away in any circumstances and bind herself by an obligation in law that does not require him to pay anything. On the other hand, it is implied that the husband would pay £30 for an indefinite period in any circumstances. He concludes that if there was a contract in this case then the trivial promises which are made in a domestic arrangement will also have to be made enforceable by law. As the parties never intended to make a bargain which could be enforced by law there was no contract formed. The husband promised to make the payment and thus had a bargain whereas the wife had no bargain at all due to which the appeal should be allowed. It can be concluded from his reasoning that LJ Warrington had refused to hold a contract between the parties on the basis that the wife had no bargain and that the promise was made between a husband and wife.
Warrington’s reasoning takes a legal approach to a rather social dilemma. The case gives us a context of the traditional patriarchal society where the role of women in society was restricted to the household due to which she was economically dependent on the husband. Their dependence made them vulnerable to promises like the one which is made in the present case on their husband. In this context, it can be implied that the husband had to provide for his wife in any circumstances, as what if the wife had gone back with her husband to Ceylon against the doctor’s advice, then also the husband would have been responsible for providing care and services to his wife. It can also be inferred that the wife may not have travelled back due to the extra expenses and the care that the husband would have had to bear by going back to Ceylon. The judgement by LJ Warrington could also be considered as being discriminatory on the basis of the relationship between parties. Due to the simple reason that the parties who made the contract had an intimate relationship, the judge allowed the appeal and judged on the nature of the relationship between parties and ignored the freedom of contract which should be present within the domestic setup rather than being non-existent.
By distinguishing between a contract and a promise, the doctrine of Intention to Create Legal Relations was carved out from Lord Atkin’s judgement in Balfour v. Balfour. He reasoned that such agreements like the one which is made in the present case are common and even if Mrs. Balfour had provided consideration for Mr. Balfour’s promise, then also her claim would have failed as the parties had not intended to create legal relation. He presumed that due to the nature of the relation between the parties, there was no intention to create legal relations. He argues that agreement such as these fall outside the contract law. Lord Atkin’s aim was to safeguard those promises which all of us makes regularly in a domestic arrangement. However, If in the concerned case, the appeal was rejected by the court and it was established that all agreements which are domestic in nature which have consideration form a valid contract, then it would have opened the floodgates to a number of agreements which are based on natural love and affection and would have led to unlimited litigations in a sphere which should be protected from these possibilities. By formally establishing this doctrine, Lord Atkin protected the private domain of life from the interference of the courts.
Prince Saprai has criticized Lord Atkin’s reasoning on the grounds that through Balfour he is endorsing division of labour in society by separating the two worlds of commerce and family. By separating these two worlds, he is restricting the scope of contract law to the commercial sphere. However, through his article, he argues that both the spheres are dependent on each other, as commerce makes it possible to have a family life and family becomes a safe space from the market which is a world of self-interest. This argument is valid on the grounds that both the spheres depend on each other and cannot be separated as two distinct worlds without any connection between them. By clearly demarcating the boundaries of the market and the family, Lord Atkin is asserting the deeply entrenched notions of patriarchy where the women’s position and role in society is restricted to the domestic sphere while the man has the right and freedom to do anything as he is part of the commercial sphere.
Traditionally, the legal system has always restricted to the commercial sphere. Lord Atkin in lieu of safeguarding the private life of family has robbed off women of the freedom to make contract and excluded her from the outside world. Lord Atkin has also been criticized on the grounds that he did not conduct a detailed investigation about the facts to ascertain whether there was an intention to create legal relations rather he presumed that there was no intention on the basis of the relationship between parties. Despite the presence of all the essential elements which are crucial for a valid contract, the plaintiff was unable to claim the damages. Due to this judgement, an extra hurdle was added in order to convince the court of the intention of the parties. The court also fails to recognize the branch of relations which are based on natural love and affection in Contract law.
Under common law, according to the doctrine of intention to create legal relations, an agreement cannot be considered as a legally enforceable unless the parties intended it to be legally binding. The test which is used to determine the intention of the parties is an objective one where the court has to consider what the parties said and wrote in the light of all surrounding circumstances and that speaking and writing in such circumstances the parties would have intended to create legal relations.The scope of this doctrine was extended to other agreements which are also made in a domestic set-up and not limited to only the agreements between husband and wife. The decision in the Balfour v. Balfour establishes that there is a presumption in relation to the agreements which are made in domestic arrangement that the parties did not intend to create a legally enforceable agreement. The burden is on the party alleging that there exists a valid contract to prove the same and refute the presumption.
The nature of this doctrine of Intention to Create Legal Relations has been criticized on many grounds. Under English law, the concept of Bargain is central to the enforceability of contracts and the essential elements for bargain are offer, acceptance and consideration. To differentiate a promise from a contract, the parties have to make an agreement in the form of bargain which itself provides a test of intention due to which it becomes quite redundant to also separately prove that the parties intended to have legal relations.
The parties who have already proved that there was an offer, acceptance and consideration have already signified their intention of creating a legally enforceable agreement. Bhawna Gulati argues that in common law countries, as consideration is one of the essential elements of a valid contract, the additional requirement of proving an intention to create legal relations should not be enforced. One of the main issues that also arise due to the doctrine is when the contracts are formed in an intermingled circumstance in which it is not clear whether the transaction was a domestic or a commercial one. This issue can arise in family businesses, where sometimes commercial agreements are made within the domestic framework.
People are becoming more individualistic and profit oriented in their approach even in family relations to secure their agreement. A drawback of this doctrine is that in a domestic setup, a promisor may easily exploit the promisee without any obligation or accountability as these agreements would not be enforceable in the court of law.
Although the invocation of the doctrine of the intention to create legal relations in Balfour v. Balfour may have been significant in the 20th century however, the relevance of this doctrine in the 21st century is decidedly questionable. The relevance of this doctrine in the modern law have been contested by various legal scholars. Michael Freeman has argued that marriage in Balfour was a ‘Victorian marriage’ and the concept of marriage has thus evolved from being a ‘personal’ institution to being no longer a ‘social’ institution. Marriage today is more about self and autonomy which has also gained prominence in the modern family law. Women are no longer associated only with the domestic sphere; they are as much part of the commercial sphere as the men. Therefore, the doctrine no longer serves the purpose which it was initially made for as the world of commerce and family are constantly intersecting and the boundaries have become more fluid. Contract law has the capacity to include different forms of marriage and family which are not considered in the traditional framework of marriage and family institution. As family law is also based on these traditional notions and idea of a family and a marriage, it restricts the freedom for new forms of family and marriage. These orthodox notions of family also limit the rights of LGBTQIA+ communities to have families. Therefore, the contract law has the capacity to open doors for these communities in having a real chance at having a family of their own choice.
In Balfour v Balfour, the ruling given by judges is prejudiced by the deep entrenched notions of traditional marriages and patriarchy. The judgement has been discriminatory towards women who were economically dependent on their husbands and had no freedom to contract as they were not considered part of the commercial sphere. In order to distinguish a promise from a contract, the court of law labelled all the promises in a domestic arrangement as being just empty promises and therefore gave a medium for dominant parties to exploit the marginalised in the social hierarchy. To prevent the opening of floodgates to unlimited litigations, the court of law had ironically closed the doors for the ones who were the most subjugated in the private sphere. The creation of a new doctrine to establish the intention between the parties is impractical as the intention of parties is implied when there is a bargain which makes the doctrine quite redundant. The doctrine of ‘Intention to Create Legal Relations’ not only confines the scope of the Law of Contract but also infringes the right to freedom which is the cardinal principle of law.
References Ewan McKendrick, Contract Law Texts, Cases and Materials (5 edn, Oxford University Press 2012) 273.  Saprai P, “Balfour V Balfour and the Separation of Contract and Promise” (2017) 37 Legal Studies 468.  J. Beatson, A. Burrows and J. Cartwright, Anson’s Law of Contract (29 edn, Oxford University Press 2010) 71.  Gulati B, “Intention to Create Legal Relations: A Contractual Necessity or An Illusory Concept” (2011) 02 Beijing Law Review 127.  Saprai P, “Balfour V Balfour and the Separation of Contract and Promise” (2017) 37 Legal Studies 468.
Author Details: Palak Saraswat is a student at Jindal Global Law School, O.P. Jindal University.