Facts of the case
In this case the plaintiff, Mrs. Balfour, sued the defendant, Mr.Balfour, her husband for money due under an alleged verbal agreement, whereby he undertook to allow her 30, a month in consideration of her agreeing to support herself without calling upon him for any further maintenance. The parties were married in 1900. The husband was resident in Ceylon (present day Srilanka), where he held a Government appointment.

The plaintiff accompanied him to Ceylon, but in 1915 they returned to England defendant being on leave. In 1916 he went back to Ceylon, leaving her in England, where she had to remain temporarily under medical advice. The plaintiff alleged that the defendant before returning to Ceylon entered into the above agreement. The parties' relationship deteriorated and the parties began living apart, the plaintiff subsequently obtained a decree nisi for restitution of conjugal rights, and an order for alimony.

Procedural history
An additional judge of King's Bench Division presided by Justice Sargant, held that the defendant was under a responsibility to support his wife and there exists a strong contract between the defendant and the plaintiff. The consent of the plaintiff to this type monthly transfer was a valid to constitute a required contract between the couple.

Issue:

1. Was the agreement between Mr. and Mrs. Balfour a valid contract?
2. Was the defendant's offer intended to be legally binding? Means was there any intension of the parties to enter into a legal agreement?
3. In what conditions a court refuse to enforce agreements between spouses?

Arguments by Appellant:
The agreement made by the parties was a domestic agreement and not a legal agreement. Mr. Balfour didn't have any intention to legally bind each other or creating a legal agreement
Arguments by Respondent- Mrs. Balfour is regarded to be given the money as the husband entered into the contract by offering her 30 and she agreed and stayed back in England.

Rule
In this case comes a important rule that incorporates the role of intention into the law of contract. The rules were applied to answer- does agreements between spouses are legally binding to have enforceability in courts as contracts? The rule of intention to create legal relationship in invoked in this case.

Despite having marital relationship Mrs. Balfour was suing her husband claiming that Mr.Balfour perform the promise not because she is her wife but as a rational person who made a promise. To enforce an agreement as contract there has to be consideration and a legal intension to make it contract but in this case both the parties were husband and wife and as per the nature, situation and the arguments of Appellant the court of appeal reversed the Decision of Sargant J. saying the alleged agreement did not constitute a legal contract, but was only an ordinary domestic arrangement which could not be sued upon. Mutual promises made in the ordinary domestic relationship of husband and wife do not of necessity give cause for action on a contract. The court also looked upon the rule of agreements result into contract between spouses.

Analysis
In this case lower court held the agreement enforceable by law as stating that Mrs. Balfour's consent was a valid consideration to make contract enforceable. The case was taken into appellate court held agreement unenforceable. The rule of consideration was reviewed. Warrington LJ and Duke LJ doubted the consent of Mrs.Balfour as valid consideration, whereas Atkin LJ comes with a doctrine of intention to create legal relations that found to be decisive step to reach the verdict.

He applied the doctrine only written in the textbooks. It was the first time this rule of law was invoked and became essential in laws of England to constitute agreements into contracts. It is said that this doctrine is based on public policy, as of its nature, the law of contract should not interfere in domestic situations otherwise courts would be flooded by trivial domestic disputes.

Then doctrine of intension to create legal relationship by Atkin LJ achieved great prominence, referred as an animus contrahendi. Later in cases Salmon LJ clear that this doctrine a factual, not legal, presumption. In contractual intention what matters is the thinking of a common person in the given situation.

Conclusion
A contract is not enforceable unless the parties intended the contract to create legal relations. The parties intended to create legal relations is determined accurately by examining the circumstances existing at the time of the execution of the contract. This same will be applied to the agreements between the spouses and it will have same effect as if the agreement made between any other rational people.

Our Suggestion:

1. Basics Of Contract Law
2. Essentials of a Valid Contract
3. Judicial Precedent Is Source of Law
4. Intention to Create Legal Relationship
5. Balfour Vs. Balfour- Case Analysis [1919] 2KB 571
6. The Doctrine Of Frustration Challenges The Validity Of The Fundamental Principle Of Pacta Sunt Servanda