Contract 2nd Sem Project

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Introduction

Lord Denning outlined that ‘would reasonable people regard this agreement as intended to be
legally binding?’ Intent in contract law is referred to as having the intention to form a
legal contract, it is not enough that both parties are involved in a contract, but there must be an
intention to create a legal relation. This is because an agreement can exist but may not be legal,
therefore, it needs to have legal intent.

In family and social arrangements there is difficulty to suggest legal intent that would become
contracts because of the domestic arrangement such as between husband and wife. In social
situations there may be an offer, acceptance and consideration, to do something for something in
return but there may not be anything that legally binds that agreement. In the case of Balfour v
Balfour (1919), it was ruled that because husband and wife were living in amity, there was no
legal intent when an agreement was made because of the domestic situation as husband and wife,
and that their dispute should be settled without legal proceedings. In this case it was presumed
that legal intent does not exist.

The legal definition of presumption is something that is expected to be taken as the truth. The
legal definition of rebuttal is that it is expected that the presumption is not true.

In the case of Merritt v Merritt (1970), the husband and wife became separated when they made
an agreement. The husband promised to pay for certain expenses, he did not, and defended
himself by claiming that the agreement was made within his family and did not have legal
relations. However, the court found the agreement to be enforceable because the agreement was
made when they were not in living amity and when they became separated. The presumption of
legal intent was rebutted in this case because there was evidence that they were not living
together. Therefore, the court may enforce an agreement if it is made when husband and wife are
not living in amity or are separated.

In Jones v Padavatton (1969), there was an arrangement between mother (Jones) and daughter
(Padavantton), the court decided that the arrangement was between family members and was not
intended to become legal agreements because the agreements were not referred as contracts
because of their uncertainty.
In the case of Simpkins v Pays (1955), this was between grandmother, granddaughter and a
lodger. The lodger wanted a share of prize of a competition that the lodger entered into with
grandmother and granddaughter. The court decided that due to the arrangement, it was referred
to as a legal relation. Therefore, the lodger was entitled to one-third of the prize.

The intention of the parties is naturally to be as curtained from the terms of the agreement and
the surrounding circumstances. It is for the court in each case to find out whether the parties must
have intended to enter into legal obligations. “In the case of arrangements regulating social
relations it follows almost as a matter of course that the parties do not intend legal consequences
to follow. In the case of arrangements regulating business relations it equally follows almost as a
matter of the course that the parties intend legal consequences to follow.’1

So law of contract does not cover other arrangements which may be for moral or social purposes.
Thus, even though here could be an offer , consideration , acceptance for the promise ; certain
agreements do not catch up the spirit of contract and hence they are excluded from legal device
by virtue of the fact that the party did not intend to create a legal relation.

Intention to create legal relationship has not been expressly mentioned in the Indian Contract
Act, 1872. But we find its implications in most of the sections like section 37 which creates an
obligation upon the parties to perform their respective duties. Usually there is legal intent in
commercial agreements because this usually involves the exchange of money for goods and
services. In the case of Carlill v Carbolic Smoke Ball Co (1893), the court decided that the
contract would be enforceable and therefore sided with the consumer.

Legal intent can be rebutted; a written clause in a contract with a rebuttal is called an honourable
pledge clause. This has happened in the case of Rose and Frank v Crompton (1925). This was
later confirmed in the case of Kleinwort Benson v Malaysia Mining Corporation (1989). In this
case the courts found that there is no legal and contractual obligation but only a moral obligation.
In the case of Jones v Vernon’s Pools Ltd (1938)2 there was rebuttal because the consumer is
usually unaware of a clause which means that the Pools company is not obliged to pay out.

1
PerBANKES LJ at p. 282 in frank company vs JR Bros ltd. 2KB 261 (CA)
2
(1938) 1 WLR 328 (CA) at p. 647.
Certain Act of Parliament can make a contract become unenforceable. For instance section 29 of
the Post Office Act 1969 illustrates that accepting letters and parcels does not create a contract
between the post office and the senders. Furthermore, section 179 of the Trade Union and
Labour Relations Act 1992 outlines that conditions which are agreed between employers and
trade unions are not legal and not enforceable, but the conditions only become legally binding
and enforceable when conditions are in writing. An example of this is in the case of Ford Motors
AUEFW (1969).

When forming a contract, legal intent becomes an important part of that contract. Offer and
acceptance, consideration and legal intent form a contract. It is possible that a contract can be
formed without consideration; however, legal intent is still important in forming a contract.
Judgement
The case of Jones v Padavatton concerned whether or not a legally enforceable contract existed
between the parties, in this case a mother and daughter. The judgements of Salmon LJ and
Fenton Atkinson LJ, although reaching the same conclusion have very different reasoning.
Salmon LJ considered that two main factors needed to be addressed; whether or not the parties
had intended a legally binding contract, and whether the terms of the contract were sufficient to
be legally enforceable.

The English law operates generally on an objective approach based on what a reasonable person
in the position of the parties would have intended. Salmon LJ follows this approach in his
judgement, stating it is a presumption of fact that when arrangements are made between family
members, they are not intended to create a legal relationship but are rather based on mutual ties
of trust and affection.3

This presumption was established by Atkins LJ in his explanation of the case Balfour v Balfour
and is cited by Salmon LJ, however he does go on to accept that in some circumstances just
because a, “Contracting party is unlikely to extend his pound of flesh does not mean he has no
legal right to. ” I consider that the principle illustrated by Balfour v Balfour, although
fundamental for many cases, may not be so relevant considering the circumstances of this case.

In a society of increased domestic disruption, illustrated through statistics such as rising divorce
rates, it is very arguable that family arrangements are becoming more likely to be intended as
legally enforceable. In considering the very special circumstances of this case, I consider it is
possible to distinguish it from that of Balfour v Balfour4 and rather follow the approach of
Fenton Atkinson LJ, studying the specific intention of the parties rather than the presumption
derived from the case of Balfour v Balfour.

Salmon LJ considers the second factor to be addressed is whether the terms of the agreement
were sufficient enough to be legally enforceable. He considers the intentions of the daughter
were clear- to leave Washington and study for the Bar in England, but did not consider the

3
Spellman v Spellman, (1961) 1 WLR 921 (CA)
4
(1919) 2KB 571 at pp. 578-79
mother would have intended to give up all her rights concerning the house. The arrangements
were too vague to have contractual intent.

Similarly there is no evidence that the mother ever intended her daughter to receive any more
than $200 in West-Indian terms, a month maintenance support. On this point I agree with
Salmon. In English law, if the terms of an offer are not certain, the resulting agreement can fail. I
do not consider that the terms were certain enough to ensure a legally binding contract, and here
agree with the explanation from Fenton Atkinson LJ, that the responsibility was for the daughter
to establish a contract in relation to the house and she totally failed to do so.

Salmon LJ considered alongside this, that the terns of the offer could not possibly exceed five
years from 1962 considering all circumstances of the case, and thus the daughter was entitled to
nothing further under the original agreement Salmon LJ concluded his judgement by addressing
the counterclaim referred to by the CCJ, and states that a reasonable compromise should be
reached on the figures, so as not to exacerbate ill feeling between parties. This view in
considered too by Fenton Atkinson LJ.

Fenton Atkinson LJ addresses the issues of consideration and intention in his judgement; issues
which I have to consider are far more relevant to the specifics of this case. He addresses several
points in his judgement, firstly whether the agreements made between the parties were intended
to be legally enforceable, secondly did the mother intend to be legally bound to support her
daughter for an uncertain period of time, and thirdly did the daughter assume a contractual
obligation to complete her studies.

Fenton Atkinson LJ concludes that consideration was given by the daughter in the form of
executed consideration, evident through her move from Washington to London, but does not
consider that here consideration can determine whether the parties intended a legally binding
contract. The courts generally apply an objective approach when studying intention, however I
agree with Collins, who states that this objective approach conflicts with reality.

Fenton Atkinson LJ,5 following this approach, states that it is the history of this case which most
accurately points to the intentions of the parties, and highlights three important factors. Firstly,

5
ATKIN J at p. in Rose Frank co. v JR Bros ltd, (1923) 2 KB 261 (CA)
that the payments of $200 were accepted by the daughter without any indication that the mother
was contractually bound to a larger sum, secondly, that when in 1964 The mother bought the
property, many matters had been left open, such as the control of rents, and occupation
boundaries.

The final factor highlighted, and which I consider to be of huge significance, is the behaviour of
the daughter when her mother visited. The daughter was evidently extremely upset that the issue
had become litigated, and stated that a mother does not ‘normally’ sue her daughter. This is
perhaps the strongest indication that the daughter had never intended legal consequences to arise
from the agreement. Fenton Atkinson LJ was satisfied that no legally binding contract had been
intended, and the arrangements had been based on mutual trust.

He held that the mothers claim for possession should succeed, and the appeal allowed. Although
Salmon LJ and Fenton Atkinson LJ reached the same final judgement, I do not consider that the
reasoning of Salmon was as relevant to this case as that of Fenton Atkinson LJ. As I have
mentioned above, the objective approach applied by Salmon LJ cannot be applied in every case
and may in fact be becoming outdated.6

The approach adopted by Fenton Atkinson LJ must be considered more appropriate for the very
special circumstances of this case, and I agree that the intention of the parties was best
determined through the behavioural history of the mother and her daughter rather than the
judgement of Balfour v Balfour. I do not deny that the reasoning of Salmon LJ is that which the
majority would be likely to adopt, and agree with many other

6
Australian contract law, ( Apr 08, 2018 at 11:15 pm) https://www.australiancontractlaw.com/cases/jones.html
Facts of the case
A mother promised to pay her daughter $200 per month if she gave up her job in the US and
went to London to study for the bar. The daughter was reluctant to do so at first as she had a well
paid job with the Indian embassy in Washington and was quite happy and settled, however, the
mother persuaded her that it would be in her interest to do so. The mother's idea was that the
daughter could then join her in Trinidad as a lawyer. This initial agreement wasn't working out as
the daughter believed the $200 was US dollars whereas the mother meant Trinidad dollars which
was about less than half what she was expecting. This meant the daughter could only afford to
rent one room for her and her son to live in. The Mother then agreed to purchase a house for the
daughter to live in. She purchased a large house so that the daughter could rent out other rooms
and use the income as her maintenance. The daughter then married and did not complete her
studies. The mother sought possession of the house. The question for the court was whether there
existed a legally binding agreement between the mother and daughter or whether the agreement
was merely a family agreement not intended to be binding.7

Held:

The agreement was purely a domestic agreement which raises a presumption that the parties do
not intend to be legally bound by the agreement. There was no evidence to rebut this
presumption.

7
E law source, ( Apr 08 ,2018 at 11:12 pm) http://www.e-lawresources.co.uk/Jones-v-Padavatton.php
Conclusion
In domestic arrangements it is generally assumed that the parties do not intend to relate legal
relations. In many domestic agreements, for example those made between husbands and wives
and parents and children, there is no intention to create legal relations and no intention that the
agreement should be subject to litigation. Familial relationships do not preclude the formation of
a binding contract, though to create contractual relations, there must be a clear intention on either
party to be bound.
While there are conflicting legal authorities on whether specific facts involving familial relations
result in binding and enforceable agreements, it seems settled that in domestic agreements there
is a rebuttable presumption that the parties do not have intention to create legal relations.

Much importance is given to the policy that private lives of the citizens should be protected from
too much interference from the courts. Chen-Wishart calls this ‘Freedom from contract.’ Adams
and Brownsword therefore correctly state that the ‘“sanctioning” presence of courts might inhibit
social relationships.’ There are several points which could be made here – remember that when
the courts talk of intention, they seldom mean the actual intention of the parties – evidence
concerning the psychological disposition of the parties would not be regarded as relevant. What
the judges are interested in is a reasonable inference from the actions of the parties – an objective
test. Now often, what is a reasonable inference will tell you lots more about the person who is
doing the inferring than it will about the state of mind of the persons who are the subject of the
discussion.

This case (Jones v. Padavatton [1969] 1 WLR 328), like BalfourVBalfour1919, demonstrates
that domestic arrangements, however complex, are presumed not to create contracts, unless there
is clear indication to the contrary. Unlike the earlier case, however, the complexity and precision
of the arrangements in this one meant that the facts had at least to be considered, rather than
being dismissed as “outside the realm of contracts”.

Facts- Mrs Jones offered to pay for her daughter, Mrs Padavatton, to study law if she (the
daughter) left the USA and came to England. This she did. The mother then bought a house in
London which the daughter lived in; her maintenance was payed from the rents of other tenants.

Eventually mother and daughter fell out, and Mrs Jones took action to reclaim possession of the
house. It was ruled that although the circumstances were such that she could not have done this if
the tenant had been anyone other than her daughter, there was no evidence to show that the case
overruled the standard assumption that domestic arrangements are not contracts.

Judgment- The Court held that there was no binding contract. Although there would have been a
contract if it was not the domestic parties related, there was insufficient evidence to rebut the
presumption against domestic arrangements.

The doctrine of intention to create legal relations to create legal relations has not lacked its
critics. Some, such as Professor Freeman, are critical of the way in which it has been used to
deny legal effect to agreements made in a family context. Others points out that the doctrine rests
on a fiction in that the parties to the alleged agreements frequently have no discernible intention
one way or the other. . But it is assumed that it is a necessary part of contract. In the case of
Albert v Motor Insurers’’ Bureau , it was stated by the Upjohn LJ-

“The hazards of everyday life, such as temporary indisposition, the incidence od holidays, the
possibility of a change of shift or different hours of overtime, or incompatibility arising, make it
most unlikely that either contemplated that the one was legally bound to carry and the other to be
carried to work.”

It is stated in ” Chitty on Contracts ” (25th Edition, Volume I, para. 123) thus:

” An agreement, even though it is supported by consideration, is not binding as a contract if is


was made without any intention of creating legal relations. Of course, in the case of ordinary
commercial transactions, it is not normally necessary to prove that the parties in fact intended to
create legal relations. ” (emphasis supplied)

In our Indian law the intention to create legal relations is not given as an essential ingredient of
contract law, but even the apex court of India has expressed its reservation about the need of this
separate requirement of “intention to contract” under the contract act. Going by the criticism
which is already there in the West, the court found that it was a necessity of those systems where
consideration was not a requisite of enforceability. Thus it is still an open question whether the
requirement of “intention to contract” is applicable under the Indian Contract Act in the way in
which it has been developed in England.

But earlier to this, a limited recognition of the applicability of this principle in India could be
inferred from the decision of the Supreme Court in Banwari Lal v. Sukhdarshan Dayal,[13]. In
an auction sale of plots of plot, a loudspeaker was spelling out the terms, etc., of the sale, one of
the statements being that a plot of certain dimensions would be reserved for Dharamshala (public
inn). Subsequently that plot was also sold for private purposes. The purchasers sought to restrain
this. Chandrachud J (afterwards CJ) said:

“Microphones…….. have no yet acquired notoriety as carriers of binding representations.


Promises held out our loudspeakers are often claptraps of politics. In the instant case, the
announcement was, it at all, a puffing up for sale.”

In a subsequent case on the subject, the Supreme Court noted the general proposition that in
addition to the existence of an agreement and the presence of consideration there is the third
contractual element in the form of intention of the parties to create legal relations.

Ultimately we should assume that the intention to create legal relation is a essential requirement
of contract. At the first instance it may have some similarities with consideration but there may
be so many cases when both these elements are different. As like, it two friends decided to go to
a restaurant, and one of them promises to pay for the drink and the other for the food then we can
not say that there is no consideration but still there is no intention to create legal relations, and if
anyone of them sue the other for breach of contract then the action should fail.
Aims and objectives
The researcher has tended to analyse the case of Jones vs Padvatton, The researcher has tried to
accommodate all the principles used in this case.

Research question
1.How the intention to create a legal relation differs in cases of family arrangement from
ordinary cases?

2. What was held in the case of Jones vs Padvatton?

3. What were the principles used?

Hypotheses
1.There can not be a contract between close relatives.

2. Husband and wife can not contract with one another.

limitations
The researcher had a time limit of one month. He had limited sources for research, so the
researcher had to restrain himself to the study of a limited area.
Bibliography

BOOKS

1. Contract and Specific Relief, Avtar Singh


2. Contract I , Dr. RK Bangia

Websites

1. www.australiancontractlaw.com/cases/jones.html
2. www.e-lawresources.co.uk/Jones-v-Padavatton.php
3. www.revolvy.com/main/index.php?s=Jones%20v%20Padavatton
Index

1. Introduction
2. Aims and objectives
3. Research questions
4. Hypotheses
5. Limitations
6. Facts of the case
7. Judgement
8. Conclusion
9. bibliography
acknowledgement

This research was supported / partially supported by faculties of Chanakya National Law
University. I thank my companions from who provided insight and expertise that greatly assisted
the research, although they may not agree with all of the interpretations/conclusions of this
paper.

I thank Mr. Sushmita Singh for her assistance with research technique and methodology.

I would also like to show my gratitude to the faculty of Law of Contract for sharing her pearls of
wisdom with me during the course of this research, and I thank “anonymous” reviewers for their
so-called insights. I am also immensely grateful to the faculty of Research Methodology for his
comments on an earlier version of the manuscript, although any errors is my own and should not
tarnish the reputations of these esteemed persons
declaration
I DECLARE THAT THE PROJECT ENTITLED “Case analysis of Jones vs Padvatton”

SUBMITTED BY ME FOR PARTIAL FULFILMENT OF THE LAWS OF CONTRACT

COURSE IS MY OWN WORK.

THIS PROJECT HAS NOT BEEN SUBMITTED FOR ANY OTHER DEGREE /

CERTIFICATE / COURSE IN ANY INSTITUTE OR UNIVERSITY.

NAME – PRABHAT KUMAR

ROLL NO. 1746


CHANAKYA NATIONAL LAW UNIVERSITY , PATNA

FINAL DRAFT –SUBMITTED IN THE PARTIAL FULFILMENT OF THE COURSE

TITLED LAW OF CONTRACT ON THE TOPIC “ CASE ANALYSIS OF JONES V


PADVATTON”

Submitted to- Submitted by-

Mrs. Sushmita Singh Prabhat kumar

Faculty of law of Contract Roll no. 1746

B.A., LLB. (2017-22)

2ND SEMESTER

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