Intention to create legal relations

Even with an offer, acceptance and consideration, a relationship may fail to result in a legally binding if the parties did not intend, in the eyes of the reasonable assessor, to create a legal relationship. This is particularly so with domestic, rather than commercial, agreements. In these examples there would probably be no intention to create legal relations:

• A mother agrees to pay her son weekly pocket money of £10 only if he keeps his bedroom tidy.

• A man agrees to give his sister £100 until she’s paid on Thursday, providing she collects his child from school on Tuesday.

These are examples of domestic relationship in which the parties are closely connected and where the agreements were intended to have moral, rather than legal force. In other words, if the mother or man reneged on their agreements they cannot be sued for the unpaid amounts, even if the son and sister had kept their side of the bargain.

But some domestic arrangements can have legal force, such as when two friends or siblings reach agreement on how they will contribute to a joint business venture. Or, even if the adventure is not a joint one, they may have formalised the basis on which they will contribute. Much depends on an objective consideration of all the circumstances.

Whilst there is a presumption that the parties to domestic agreements did not intended to be legally bound, this presumption can be rebutted with particular facts. Moreover, the intention can sometimes be denied on public policy grounds, such as may arise from the undesirability of opening the floodgates or of allowing husbands and wives to sue each other over domestic matters. As one judge put it over 100 years ago: ‘In respect of these promises [between husband and wife] each house is a domain into which the King’s writ does not seek to run, and to which his officers do not seek to be admitted.’ (1)

(1) Balfour v Balfour [1919] 2 KB 571, Atkin LJ.