The case of Balfour v. Balfour (1919) addresses the enforceability of agreements between spouses and explores the concept of intention to create legal relations. The case involved a husband, Mr. Balfour, who had agreed to provide a monthly allowance to his wife, Mrs. Balfour, while he was working abroad. After their separation, Mrs. Balfour sought to enforce the agreement, claiming that Mr. Balfour had failed to make the payments.

• 1. Whether the agreement between Mr. and Mrs. Balfour was intended to create legal relations and thereby be enforceable as a contract.
• 2. Whether personal agreements between spouses can constitute legally binding contracts.

• • Lord Justice Atkin observed that agreements made between spouses, especially those related to personal and domestic matters such as maintenance, generally do not carry the intention to create legal relations. He noted that in personal family arrangements, the parties typically do not intend their agreements to have legal consequences. The intention to create legal relations is a fundamental requirement for a contract to be enforceable.
• • The case highlighted the principle that the nature of the relationship between the parties can affect the enforceability of an agreement. In this case, it was concluded that a mere domestic arrangement between husband and wife, made with no intention to enter into a legally binding contract, cannot be enforced by law.

The Court held that the agreement between Mr. and Mrs. Balfour was not legally enforceable as a contract. The decision was based on the finding that the parties did not intend to create legal relations with their domestic agreement. The Court's ruling established that agreements of a personal nature between spouses are generally presumed not to have legal consequences unless there is clear evidence of the intention to create legal obligations.

This case laid the foundation for the legal reaction theory in contract law, which posits that an agreement's enforceability relies upon whether the parties intended to create legal relations.