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Creating legal relations in English law


Creation of legal relations is a doctrine in English contract law that states an agreement is legally enforceable only if the contracting parties may be deemed by the court to have intended it. This doctrine operates in addition to consideration. There is with most commercial agreements a strong rebuttable presumption that parties intend to create legally binding relations. However, the reverse is true with most social and domestic agreements.

Whilst most social agreements are not intended to have any legal consequences, this requirement of contracting has been labelled 'fictitious', and 'superfluous'. However, it has been stated that the need for parties to show intent to contract is important, in allowing courts to dismiss frivolous social agreements, which for policy reasons should not be legally enforceable.

Postnuptial and domestic agreements made between spouses are rarely found to result in legally enforceable contracts. This principle was firmly established at common law by the early 20th century case of Balfour v Balfour, where a husband's promise to pay his wife an allowance of £30 a week - during his absence on business - was deemed unenforceable. Here, it was stated that as a general rule, agreements between spouses would not be legally enforceable:

The matter really reduces itself to an absurdity when one considers it, because if we were to hold that there was a contract in this case we should have to hold that with regard to all the more or less trivial concerns of life where a wife, at the request of her husband, makes a promise to him, that is a promise which can be enforced in law.

This principle is not absolute however, and clearly in cases where spouses are not on friendly terms, it is important they be able to make enforceable agreements. Where a husband who left his wife agreed to transfer title of their house to her, if she paid off the remainder of the mortgage, this was held to be enforceable. This is a necessary distinction; if it were not the case, it would be unduly difficult for divorced couples to make financial provisions, or to divide property.

Agreements made between other family members may also be subject to the question of contractual intention, as shown in the case of Jones v Padavatton. Here, a mother made a promise to her daughter that she would pay her an allowance of $200 a month, and provide her with a house, if she moved to England and studied for the bar. The Court of Appeal held that the mother held title to the house, as the agreement was purely domestic. However, Lord Denning stated in Hardwick v Johnson that where good consideration can be shown for a domestic promise, this may rebut the principle that it is intended not to have legal consequences.


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