Balfour v. Balfour
 2 KB 571
(Consideration-Intention to create legal relations)
Facts: A husband was employed in Ceylon. He returned with his wife to England on leave, but she was unable to go back to Ceylon with him due to medical reasons. He consequently promised orally to make her an allowance per month until she rejoined him. He failed to make the payment and she sued him.
Lord Atkin: “The consideration may consist of either some right, interest, profit or benefit accruing to promisor, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by promisee.”
Contention(s): Mrs. Balfour contended that if the wife is living apart from her husband by mutual consent then the right of the wife to pledge her husband’s credit arises. If however, instead of doing so, she agrees to give up that right and to accept an allowance instead, she is entitled to sue for it. Therefore, consideration for the promise by the husband to pay the allowance was that Mrs. Balfour gave up her right to pledge her husband’s credit (which means that, she will not be asking for greater sum of money from her husband directly, or, using the knowledge that she has the right to act in capacity of his agent, she would not use his credit to a greater advantage).
Lord Duke: The husband has a right to withdraw the authority from his wife to pledge his credit. Giving up of that which was not a right was not a consideration.
There must be intention of parties to create legal relations while entering into any agreement so as to make it enforceable by law. This intention is to be determined objectively (Smith v. Hughes): If a reasonable person in the position of offree would consider that the offer made by the offeror was intended to create legal relations, then offeror will be so bound by contract subject to fulfilment of other requirements.
In case of social engagements and family arrangements, there is a strong presumption that parties therein have no intention to enter into legally enforceable contract. Such agreements are made in amity, grounded on domestic relations between the parties and obligations arising out of those relations; and no legal consequences could reasonably have been contemplated by them for breach of such agreements.
Held: Since the agreement was made in the ordinary domestic relationship of husband and wife out of amity and necessity; intention to enter into a legally binding contract was missing and hence there was never a contract made b/w Mr. and Mrs. Balfour.
Author: Vishrut Kansal (National University of Juridical Sciences, Kolkata)