Page 190 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 12: Hire Purchasing

Notes

Case Study Case 1: Balfour vs. Balfour

alfour v Balfour [1919] 2 KB 571 is a leading English contract law case. It held that
there is a rebuttable presumption against an intention to create a legally enforceable
Bagreement when the agreement is domestic in nature.

Mr Balfour was a civil engineer, and worked for the Government as the Director of
Irrigation in Ceylon (now Sri Lanka). Mrs Balfour was living with him. In 1915, they both
came back to England during Mr Balfour's leave. But Mrs Balfour got rheumatic arthritis.
Her doctor advised her to stay, because a jungle climate was not conducive to her health.
As Mr Balfour's boat was about to set sail, he promised her £30 a month until she came
back to Ceylon. They drifted apart, and Mr Balfour wrote saying it was better that they
remain apart. In March 1918, Mrs Balfour sued him to keep up with the monthly £30
payments. In July she got a decree nisi and in December she obtained an order for alimony.
At first instance, Sargant J held that Mr Balfour was under an obligation to support his
wife. Under the judgement, the Court of Appeal unanimously held that there was no
enforceable agreement, although the depth of their reasoning differed.
Question
Why do you think did the court did not take the promise as a contract between two
parties?

Case Study Case 2: Merritt vs. Merritt

erritt v Merritt [1970] 1 WLR 1211 is again, an English contract law case, on the
matter of creation legal relations. Whilst under the principles laid out in Balfour
Mv Balfour, domestic agreements between spouses are rarely legally enforceable,
this principle was rebutted where two spouses who formed an agreement over their
matrimonial home were not on good terms.

Mr Merritt and his wife jointly owned a house. Mr Merritt left to live with another woman.
They made an agreement (signed) that Mr Merritt would pay Mrs Merritt a monthly sum,
and eventually transfer the house to her, if Mrs Merritt kept up the monthly mortgage
payments. When the mortgage was payed Mr Merritt refused to transfer the house.
In this case, the nature of the dealings, and the fact that the Merritt's were separated when
the signed the contract, allowed the court to assume that this was more than a domestic
arrangement.

Questions
1. How is this case different than that of Balfour vs. Balfour?
2. Why did the court held the contract to be one with legal binding?

Source: en.wikipedia.org

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