On legally binding contract which can be maintained in family or social matter Discuss

On legally binding contract which can be maintained in family or social matter Discuss

Introduction

A contract is an agreement; an agreement is a promise and a promise is an accepted proposal. Thus every agreement, in its ultimate analysis, is the result of a proposal from one side and its acceptance by the other. An agreement is regarded as contract when it is enforceable by law. In other words, an agreement that the law will enforce is a contract.

A contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between or among them. The elements of a contract are “offer” and “acceptance” by “competent persons” having legal capacity who exchanges “consideration” to create “mutuality of obligation.”

To be legally binding, a contract needs two essential components: 1) an agreement, and 2) consideration. Within the agreement and consideration lies an assortment of provisions that add to the legality of a contract. These include the offer, performance, terms, conditions, obligations, payment terms, liability, and default or breach of the contract.

The agreement component involves offers, counter-offers, and eventually what contract law calls the “meeting of the minds.” An agreement can be either oral or written, depending upon the contract. If you hire a taxi to drive you to the airport, then it is an oral agreement that you will pay the driver a certain sum when you reach your destination. Contracts whose agreements must be in writing include real estate contracts and contracts that last more than a year. Every state has its own legal requirements and you should consult these requirements to find the specific regulations that pertain to your type of contract.

Common legal phrase indicating that an agreement has been consciously made and certain actions are now either required or prohibited. For example, a lease for an apartment is legally binding, because upon signing the document, the lessor and the lessee are agreeing to a number of conditions. The lessor typically agrees to provide the apartment in a certain condition for a certain length of time, and the lessee typically agrees to pay an agreed upon rent and refrain from certain destructive behaviours. The other requirement for an agreement or contract to be considered legally binding is consideration – both parties must knowingly understand what they are agreeing to. If a person is forced, tricked, or coerced into entering into an agreement, it typically is not considered legally binding.

Family & Social Matters

The intention of the parties is naturally to be ascertained 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 business relations it flows almost as a matter of course that the parties do not intend legal consequences to follow. In the case of agreements regulating business relations it equally follows almost as a matter of course that the parties intend legal consequences to follow.[1]

Thos does not, however, mean that in family or social matters there cannot be a legally binding contract. All that the law requires is that the parties must intended legal consequences.

Social and Domestic Agreements

Merrit v Merrit (1970)

The husband left his wife. They met to make arrangements for the future. The husband agreed to pay £40 per month maintenance, out of which the wife would pay the mortgage. When the mortgage was paid off he would transfer the house from joint names to the wife’s name. He wrote this down and signed the paper, but later refused to transfer the house.

It was held that when the agreement was made, the husband and wife were no longer living together; therefore they must have intended the agreement to be binding, as they would base their future actions on it. This intention was evidenced by the writing. The husband had to transfer the house to the wife.

Lens v Devonshire Club (1914)

It was held that the winner of a competition held by a golf club could not sue for his prize where “no one concerned with that competition ever intended that there should be any legal results flowing from the conditions posted and the acceptance by the competitor of those conditions”.[2]

Tanner v Tanner (1975)

A man promised a woman that the house in which they had lived together (without being married) should be available for her and the couple’s children. It was held that the promise had contractual force because, in reliance on it, the woman had moved out of her rent-controlled flat.[3]

Jones v Padavatton (1969)

In 1962, Mrs Jones offered a monthly allowance to her daughter if she would give up her job in America and come to England and study to become a barrister. Because of accommodation problems Mrs Jones bought a house in London where the daughter lived and received rents from other tenants. In 1967 they fell out and Mrs Jones claimed the house even though the daughter had not even passed half of her exams.

It was held that the first agreement to study was a family arrangement and not intended to be binding. Even if it was, it could only be deemed to be for a reasonable time, in this case five years. The second agreement was only a family agreement and there was no intention to create legal relations. Therefore, the mother was not liable on the maintenance agreement and could also claim the house.[4]

Simpkins v Pays (1955)

The defendant, her granddaughter, and the plaintiff, a paying lodger shared a house. They all contributed one-third of the stake in entering a competition in the defendant’s name. One week a prize of £750 was won but on the defendant’s refusal to share the prize, the plaintiff sued for a third.

It was held that the presence of the outsider rebutted the presumption that it was a family agreement and not intended to be binding. The mutual arrangement was a joint enterprise to which cash was contributed in the expectation of sharing any prize.[5]

Parker v Clarke (1960)

Mrs Parker was the niece of Mrs Clarke. An agreement was made that the Parkers would sell their house and lives with the Clarkes. They would share the bills and the Clarkes would then leave the house to the Parkers. Mrs Clarke wrote to the Parkers giving them the details of expenses and confirming the agreement. The Parkers sold their house and moved in. Mr Clarke changed his will leaving the house to the Parkers. Later the couples fell out and the Parkers were asked to leave. They claimed damages for breach of contract.

It was held that the exchange of letters showed the two couples were serious and the agreement was intended to be legally binding because (1) the Parkers had sold their own home, and (2) Mr Clarke changed his will. Therefore the Parkers were entitled to damages.[6]

Balfour v Balfour – Domestic arrangements not contractual (1919)

This involved a husband and wife – the husband was due to return to Ceylon (as it was then called – now called Sri Lanka) where he had employment, but the wife, on medical advice was to remain in England. The husband promised to pay the wife £30-00 per month until the wife was able to join him in Ceylon. Later the parties separated and were divorced. The judge in this case was Lord Atkin. I mention this in passing, because he was the judge who was very significant in Donoghue v Stevenson (1932), but who was ostracised by other judges in the House of Lords, who did not agree with him, and this caused him much pain and upset in his later years.[7]

Lord Atkin said that commonly, parties to a marriage will make arrangements for personal or household expenses. But they do not amount to contracts, even though there may be present what would amount to consideration if it had occurred between different parties. They are not contracts because the parties do not intend that legal consequences should follow. To my mind, it would be the worst possible example to hold that agreements of this sort should be enforceable in the courts. The small courts of this country would have to be multiplied one-hundredfold if legal obligations were to result. Agreements such as these are outside the realm of contracts altogether. The consideration here is really the natural love and affection which counts for so little in these cold courts.[8]

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. [9]

It seems to me that this is just the very situation where Mrs Balfour might have had every intention of establishing an enforceable agreement with her husband. The matter under discussion here was much more important to her than was the matter in Shadwell v Shadwell – a gift from an uncle to a nephew which was held to be enforceable. How can we account for the differences in the court’s attitude in these 2 cases? Could one not have pointed to any reliance aspect of this arrangement? Some say that the courts may wish to avoid unpleasant battles between members of a family who have fallen out – but they do deal with just these disputes in so many other cases. And isn’t potential unpleasantness and hostility between peopling just the reason why the courts should intervene – to resolve the matter in an orderly way rather than leave the parties without any satisfactory way to resolve their differences?[10]

Conclusion:

Social contract theory hypothesizes about how it is that human beings are willing accept certain restrictions upon their freedom for the benefit of society. Such restrictions oftentimes take the form of laws which society requires its members to follow. In addition, social contract theory specifies the benefits of rule by the consent of the governed as opposed to living in the state of nature.[11]

Held (1993) dissents, arguing that “Contemporary Western society is in the grip of contractual thinking” (p. 193) and perforce the instrumental form of rationality that supports such thinking. As with other critics, Held questions the fundamental assumptions supporting a society constructed upon the bedrock of the social contract theory, arguing that such a society defines membership in such a way as to exclude many human beings—women and persons of colour, among others—from full and active participation in society.[12]

As helpful as critiques like these are in promoting discourse about the relationship of human beings to themselves, to one another, to society, and society to its members, these critiques have not dealt a mortal wound to social contract theory. Law, politics, and social organization in American society are rooted in social contract theory, a theory that provides a substantive rationale for answering questions about fundamental social issues, including fairness, liberty, and ethics. It is quite likely that social contract theory will continue to be at the centre of debate for the foreseeable future.[13]

References

Singh,A. (2009). Law of contract & specific relief ninth edition. Lucknow, EBC publishing.

Contract, (n.d.).Retrieved February 21, 2013, from http://en.wikipedia.org/wiki/Contract

Allbusiness (2013). What Must a Contract Contain to Be Legally Binding? <href=”#axzz2LVgFXFZI”>http://www.allbusiness.com/legal/contracts-agreements/731-1.html#axzz2LVgFXFZI

Businessdictionary (2013), Legally Binding. <href=”#ixzz2LWplpnzk”>http://www.businessdictionary.com/definition/legally-binding.html#ixzz2LWplpnzk

Merrit v Merrit (1970), from