Question

Intention not to create a legal obligation was clear from the conduct of parties which among the popular cases deals on the topic.

• A. Balfour v. Balfour
• B. Donogue v. Stevenson
• C. Derry v. Peek
• D. Birch v. Birch

Hint:

Remember the two key presumptions about intention: \begin{enumerate} \item \textbf{Social/Domestic Agreements (e.g., Balfour v. Balfour):} Presumed \textbf{NOT} to be legally binding. \item \textbf{Commercial Agreements:} Presumed \textbf{TO BE} legally binding. \end{enumerate} These are only presumptions and can be rebutted by evidence to the contrary.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The question asks for a landmark case that established a key principle in contract law: for an agreement to be a legally binding contract, the parties must have an "intention to create legal relations." This principle helps distinguish between serious commercial agreements and casual social or domestic arrangements.
Step 2: Detailed Explanation:
The classic authority on this subject is the English case of Balfour v. Balfour [1919] 2 KB 571. \begin{itemize} \item Facts: A husband, who was stationed abroad, promised to pay his wife a monthly allowance while they were living apart. Later, they separated, and the husband stopped the payments. The wife sued him for the money. \item Holding: The Court of Appeal held that the agreement was not a legally enforceable contract. Lord Atkin famously stated that agreements made between a husband and wife are often not intended to be attended by legal consequences. The parties, in the court's view, did not intend that their domestic arrangement should be sued upon. \item Principle: The case established the presumption that in social and domestic agreements, there is no intention to create legal relations, and therefore, such agreements are generally not enforceable as contracts. \end{itemize} The other cases are irrelevant: \textit{Donoghue v. Stevenson} is a tort law case on negligence. \textit{Derry v. Peek} is a case on the tort of deceit (fraudulent misrepresentation).
Step 3: Final Answer:
The popular case that deals with the topic is Balfour v. Balfour.