Balfour v Balfour

Facts

Mr Balfour was a civil servant working in Ceylon (now Sri Lanka). In 1915, he and his wife came to England on leave. When it was time for him to return, Mrs Balfour stayed behind on medical advice. Before he left, Mr Balfour promised to pay her £30 a month for her maintenance until she joined him.

The couple later separated. Mrs Balfour sued for the monthly payments she said were due under the agreement.

Issue

Was the husband's promise an enforceable contract? In particular, did the parties intend it to create legal relations?

Decision

The Court of Appeal (Warrington, Duke and Atkin LJJ) held that there was no enforceable contract. Mrs Balfour's claim failed.

Reasoning

The leading judgment is Atkin LJ's. He explained that some agreements, even if they involve mutual promises, are not contracts at all, because the parties never intended them to be legally binding. Arrangements made between a husband and wife in the ordinary course of their domestic life are a classic example.

Atkin LJ's reasons were partly about intention and partly about policy:

• Intention. Spouses who agree an allowance don't, in the ordinary way, think of it as a legal bargain enforceable in court. Their agreements are based on mutual trust and affection.
• Flexibility. Family arrangements change constantly as circumstances change. Treating each one as a binding contract would be unrealistic.
• The courts' role. If every promise between spouses were enforceable, the courts would be flooded with litigation about domestic life, which the law has no business regulating in that way.

Warrington LJ and Duke LJ agreed that there was no contract. Duke LJ also doubted whether the wife had given consideration.

Why it matters

Balfour established the presumption against intention to create legal relations in domestic agreements. It sits alongside the opposite presumption for commercial agreements, which are presumed to be binding (Edwards v Skyways Ltd [1964] 1 WLR 349).

Both presumptions can be rebutted:

• In Merritt v Merritt [1970] 1 WLR 1211, a husband who had left the family home signed a written agreement to transfer the house to his wife if she paid off the mortgage. Because the couple had separated and written the agreement down, the court found that they intended to be bound.
• In Jones v Padavatton [1969] 1 WLR 328, an arrangement between a mother and her adult daughter about funding her studies was held not to be a contract.
• In a commercial context, an express "honour clause" can rebut the presumption of legal intention (Rose and Frank Co v JR Crompton and Bros Ltd [1925] AC 445).

How it comes up in exams

Problem questions often slip a family or social agreement into the facts. A good answer:

1. identifies whether the context is domestic or social or commercial;
2. states the presumption that applies;
3. looks for evidence that rebuts it: separation, writing, reliance, large sums of money, or the businesslike way the arrangement was made;
4. reaches a conclusion on whether a contract exists before discussing breach or remedies.

On SQE1, you'll need the principle rather than the case name: domestic agreements are presumed not to be legally binding, commercial ones are presumed to be, and both presumptions can be rebutted by clear evidence.

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