welcome to the fourth lesson in the contract law module in this lesson we will discuss intention to create legal relations as we have discussed in previous lessons in determining whether a contract has been formed a court will try through reasonable interpretation to give effect to any clause that the parties reasonably understood and intended was to have legal effect we also know from previous lessons that courts determine the intention of parties by looking at objective criteria a court will look to what a party said or did and not what the party meant to say or meant to do however there are some situations where people do not intend to be legally bound by the promises they make even where those promises are objectively capable of forming a contract this is particularly true where the parties are in a close personal relationship for example where the parties are spouses or where the parties are a parent and a child in these types of situations the courts will normally presume that the parties did not intend to create a legally binding agreement or contract even when what they said and did would otherwise support this conclusion when viewed objectively this is however only a presumption which can be rebutted given appropriate facts and circumstances this presumption was recognized by the court in the balfour case in balfour the plaintiff and defendant were married in 1900 they spent most of their time from 1900 to 1915 in ceylon where mr belfor had a civil service position in 1915 they returned to england while mr belfor was on leave miss balfour became ill while they were in england and it was decided that she would remain there to recuperate while mr belfor returned to ceylon before mr belfor left england he promised to pay miss belfor 30 pounds per month for her maintenance until she was well enough to rejoin him overseas or until he returned to england eventually differences arose between them and it was decided that they should separate mr belfor stopped paying miss belfor the 30 pounds per month although miss belfor eventually obtained an order for alimony the payment did not start until 1918. miss belfor therefore sued mr belfor for the monthly payments he had promised to pay her from the time they separated in 1916 until 1918 when the alimony payments began at trial the judge found that mr belfor had an obligation to support miss belfor and therefore her consent to receive the 30 pounds per month was consideration for mr belfor's promise to pay it as such the trial judge found that mr belfor was obligated to pay the 30 pounds per month to miss belfor on appeal the court reversed the decision of the trial court and found that mr balfour's promise was not enforceable in reaching this conclusion the majority of the judges found that mr and mrs belfor had not intended to make a bargain that could be enforced at law this was because there are some situations where although all the requirements of formation are met there is no legal contract examples of these situations include an agreement to take walks together or an offer and acceptance of hospitality as a general rule agreements made between spouses living in amity peace good will or harmony are also of this character in the family setting parties normally do not intend that these arrangements should be sued upon or that they transfer legal rights this is because the family is an inner private sphere where the parties decide amongst themselves how to allocate their resources and in which they rely on natural love and affection as a basis for upholding their bargains although the presumption of no intention can be overcome in appropriate circumstances the court found that the facts in balfour did not support the interpretation that a legally binding relationship was intended in the court's view it would seem odd that mr belfor would have legally bound himself to pay 30 pounds per month under all circumstances it is also unlikely that miss balfour who was in ill health and alone in england would limit herself to that amount whatever the development of her illness since it was reasonable to assume that neither party contemplated that the payments would be fixed at 30 pounds per month no contract was formed the opposite is true in predominantly commercial relationships where it is normally presumed that the parties intend to enter into legally binding arrangements this however is still a presumption that can be rebutted in appropriate circumstances as such where parties clearly express that they do not intend to confer legal rights and duties on each other a court should normally give force to that intention and find that no contract is formed for example in the rose and frank company case rfc had been a distributor of jrc's products since 1905. in 1913 the parties entered into a new agreement which stated that the agreement was not formal or legal and that the parties could not litigate the matter in either english or american courts after becoming dissatisfied jrc refused to continue the arrangement and rfc sued in concluding that the agreement was not legally enforceable the court held that it is acceptable for parties to enter into agreements which do not give rise to legal rights and obligations although in commercial arrangements there is a factual presumption that parties intended to create legal relations that presumption may be rebutted with compelling evidence for example where the text of the agreement states that this agreement is binding in honor only this concludes the lesson on intention to create legal relations thank you for listening in the next lesson we will discuss the concept of estoppel make sure to answer the knowledge check questions at the end of this lesson before moving on to lesson five if you have any questions please post them to the owl discussion forum your questions may be answered in writing on the discussion forum or during the weekly question and answer session