INTENTION TO CREATE LEGAL RELATIONSHIP
In order to create a valid contract, it is necessary that the offer should be made with an intention to createlegal relationship.Promise in the case of social engagements such as an agreement to go for a walk, to go to a movie, to play some game, or entertain another person with a dinner, is generally without an intention to create legal relationship.Such an agreement, therefore, cannot be considered to be a contract and therefore cannot beenforced in a court of law.
BALFOUR V. BALFOUR
Sometimes, absence of such an intention could be presumed from the agreement of parties itself .In the case of Balfour v. Balfour an intention not to create legal relationship was implied .
1. In this case the defendant, who was employed on a government job in Ceylon went to England with his wife on leave.
2. For health reasons the wife was unable to accompany the husband again to Ceylon.
3. The husband promised to pay £ 30 per month to his wife as maintenance for the period she had to live apart.
4. The husband failed to pay this amount, and he was sued by the wife for the same.
It was held that in this case, there was no intention to create legal relationship therefore the husband wasnot liable.
JONES V. PADAVATTON
1. Mrs. Jones herself lived in Trinidad. Her daughter, who had been divorced and had a young son, lived in Washington and was serving in the Indian Embassy there. Mrs. Jones persuaded her daughter to leave her job in Washington and study for the bar in England to become a barrister.
2. Mrs. Jones offered to pay her daughter a monthly allowance during her studies for the bar in England.
3. The daughter reluctantly agreed to the suggestion, left the job and went to England in 1962.
4. In 1964 Mrs. Jones bought a house in England. The daughter was allowed to stay in a part of the house whereas the other part was let out. The rent received from the part of the house was given to the daughter to cover her expenses.
5. In 1967 some differences had arisen between Mrs. Jones and her daughter and Mrs. Jones brought anaction to evict her daughter. Till that time the daughter had not completed her studies for the bar.
6. The daughter contended that in view of the promise made by her mother, she was legally bound tomaintain her until she completed her studies.It was held that there was nothing to indicate that there was an intention to create legal relationship between the parties, as is evident from the fact that neither the agreement was reduced to writing nor the duration for which she was to be maintained had been mentioned.The mother's action against the daughter for eviction succeeded.
MERITT V. MERITT,
It may be noted that although in the case of close relationships, there may be generally no intention to create legal relationship but if an arrangement clearly contemplates an intention to create legal relationship, the parties become bound thereby as in Meritt v. Meritt, ;
1. The husband and wife were the joint owners of a building which was subject to a mortgage to a building society.
2. The husband left the matrimonial home to live with another woman.
3. At that time, at the insistence of the wife, the husband signed a note saying that the wife will pay all outstanding amount in respect of the house and in return "I will agree to transfer the property into your sole ownership."It was held that in this case it was clear that the parties intended to create legal relationshipand, therefore, the husband was bound by the contract.
ROSE AND FRANK CO. V. CROMPTON V. BROS LTD.
Sometimes the parties may expressly mention that it is not a formal or legal agreement, as in Rose and FrankCo. v. Crompton V. Bros Ltd. the agreement between the parties to the contract provided that ;-
"That arrangement is not entered into as a formal or legal agreement and shall not be subject to legal jurisdiction in the Law Courts…. that it (the agreement) will be carried through by the partieswith mutual loyalty and friendly co-operation. "One of the parties made a breach of this agreement. In an action by the other party to enforce the agreement.It was held that since the agreement had provided that it was not a formal or legal agreement thesame was not enforceable.
The test to know the intention of the parties is objective and not subjective, merely because the promisor contends that there was no intention to create legal obligation would not exempt him from liability (Carlill v. Carbolic Smoke Ball Co., (1893) 1 Q.B. 256. )
IMPORTANT CASES
Rose and Frank Co. v. Crompton V.Bros Ltd .
Balfour v. Balfour.
Jones v. Padavatton
In Meritt v. Meritt,
Me Gregor v. Me Gregor,
