THE UGANDA PENTECOSTAL UNIVESITY

THE GROTIOUS SCHOOL OF LAW

FACULTY OF LAW
LLB
YEAR 1
2024/2025
COURSE WORK
LAW OF CONTRACT

STUDENT’S NAME: LUBEGA ROBERT

STUDENTS REG. NO.: U/2024/LLB/1743 /W
LECTURER’S NAME : KOMAKECH ALEX

COURSE WORK QUESTION:It’s trite law that a contract to be legally

binding the parties must have formed the necessary intentions to
create legal intentions, by the case of Balfour v Balfour(1919 VL2 KB
pg 571). Discuss the veracity of the above statements.
Making a promise or even more entering into an agreement
between people causes rises a question of whether such agreement
or promise even in the presence of consideration would result into a
contract.
A contract was defined by G.H Treitel in the “Law of Contract” 1
as an agreement giving rise to obligations which are enforced or
recognized by [Link] the domestic laws of Uganda ,the
contracts act cap, defines a contract as an agreement
enforceable by law which is made with the free consent of
parties with capacity to contract for a lawful consideration
and with a lawful object with the intention to be legally
bond2. Form the above definition its noted that creation and
operation of contract is based on the parties , agreement and
consent, capacity to contract , with a lawful consideration for a a
lawful object and in addition to all these, the intention of the parties
to be legally bound.
In Pal Agencies(u) ltd v Soroti Municipal Council and another
3
court observed that in addition to an agreement that is offer
and acceptance,consideration, there must be another
essential element that is the intention of the parties to
create legally binding relation.
Like wise in Balfour v Balfour4, the defendant had promised to
give the plaintiff£30 per month for maintenance to which he
complied for awhile but stopped when their marriage broke. The
plaintiff the sued the defendant however the Learned Lord Justice
Atkin in his decision held that there was no contract between the
two since there was no intention present in the contract. He further
explained that the promises made between spouses or married
couples are just arrangements even when they have consideration
and mutual promise which may constitute valid contract are not
contracts because there is no intention between parties that in case
1
(Sweet& Maxwell 2003) 10th edition Pg 1
2
Section 9(1)
3
HCCS NO.351 of 2009
4
(1919) vl2 KB pg571
of dispute, they should be attended by legal consequences.
Therefore some promises may be binding as a matter of honour but
may not found a law suit or legal consequence. However in Brooker
v Palmer5,Lord Greene MR stated that, the law does not
impute intention to enter into legal relationships where the
circumstances and the conduct of the parties negate any
intention of any kind’. A contract is thus based on the free and
voluntary will of the parties: if they do not consent to the creation of
a legal relationship, then no legally enforceable contract will
emanate from their relationship. It should however be pointed out
that some commentators have argued that it is not necessary to
prove an intention to create legal relations that consideration is
sufficient to prove formation of a valid contract.
In most cases, the intention of parties is derived from the languages
used and the circumstances in which they are [Link] leading
case in this area is Balfour v Balfour,where a
husband(defendant), took his wife to England and he had to
return to Sri Lanka but his wife had to stay in England for
medical reasons. He agreed to pay her 30 pounds per month
for maintenance during his absence. When he failed to pay
the allowance, she sued. The court held that her action
would fail because the parties had no intention of creating a
legally binding agreement. The court held that where the
parties were husband and wife, the presumption was that
there was no intention to create a contract and the burden
was on the wife to rebut such presumption. Atkin LJ stated: It
is necessary to remember that there are agreements
between parties which do not result in contracts within the
meaning of that term in our law. The ordinary example is
where two parties agree to take a walk together or where
there is an offer and acceptance of hospitality. Nobody
would suggest in ordinary circumstances that those

5
[1942] 2 ALL ER 647
agreements result in what we know as contract, and one of
the most usual forms of agreement which does not
constitute a contract appears to me to be the arrangements
which are made between husband and wife. Those
agreements or many of them, do not result in contracts at all even
though there may be what as between other parties would
constitute [Link] are not contracts because the parties
did not intend that they should be attended by legal consequences.
However this decision was considered unfair and detrimental to the
interests of women in marriage. Lord Atkin justified it by stating that
the parties would not have contemplated litigation as a method of
dispute resolution at the time the agreement was made because of
the nature of their relationship.
In spite of the decision in Balfour v Balfour, agreements between
husband and wife may result in legally binding relations depending
on factors such as the conduct of the parties and the circumstances
of each case. For example, in Merritt v Merritt6, the husband left
the matrimonial home which was in the joint names of husband and
wife and subject to a mortgage to live with another [Link]
agreed to pay the wife 40 pounds a month out of which she had to
discharge the outstanding mortgage payments on the
[Link] the wife refused to leave the car unless the husband
reduced the agreement in [Link] husband wrote and signed a
note which stated: ‘In consideration of the fact that you will pay all
charges in connection with the house until such time as the
mortgage repayment has been completed, I will agree to transfer
the property into your sole ownership’. After the wife had paid off
the mortgage, the husband refused to transfer the house to her.
The court held that the agreement was binding since the
parties intended to create legally binding relations.
In Pettitt v Pettitt7 ,Mrs. Pettitt inherited a house in which she and

6
[1970]2 ALL ER 670
7
Pettit case pg.822
her husband lived. The husband spent 800 pounds on improvement
of the property. She sold the house in 1961 and purchased another
property which was transferred into her name alone. There was
some money left from the sale which she gave to her husband to
purchase a car. They lived in the house for four years and then
divorced. He claimed that he had a beneficial interest in the
property based on the improvements made to the new [Link] was
held that the improvements allegedly made by Mr. Pettitt were
insufficient to create an interest in the property. The court
accepted the principle enunciated in Balfour v Balfour, but
observed that although many agreements between husband
and wife are not intended to be legally binding, performance
of such agreements may give rise to legal consequences.
Lord Diplock cautioned that many of the ordinary domestic
agreements between man and woman do not possess the legal
characteristics of a contract. However it would be erroneous to
extend the presumption accepted in Balfour v Balfour that
Intention to create legal relations mutual promises between
man and wife in relation to their domestic arrangements are
prima facie not intended by either to be legally enforceable
to a presumption of a common intention of both spouses
that no legal consequences should flow from acts done by
them in performance of mutual promises with respect to the
acquisition, improvement or addition to real or personal
property for this would be to intend what is impossible in
law.
Challenges of ascertaining contractual intention in social or
domestic
agreements may also occur in relations between parents and
children. Jones v Padavatton8,a mother promised to pay her
daughter $ 200 per month if she gave up her job in the USA and
went to London to study for the Bar to which the daughter was

8
[1969] 1 WLR 382
reluctant to do. However, the mother persuaded her that it would be
in her interest to leave the job and join her in Trinidad as a lawyer.
This initial agreement was not working since the daughter believed
the $ 200 was in US dollars whereas the mother meant Trinidad
dollars, which was about half what she was expecting. This meant
the daughter could only afford to rent one room for herself and her
son to live in. By a second agreement, the mother 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 issue before the court was whether there was a legally
binding agreement between the mother and daughter. The
court held that there was no intention to create a legal
relationship between the parties and gave the mother
possession of the house. Lord Salmon agreed with the majority
decision but on different grounds. He argued that the initial
agreement was a binding contract that was intended to last for a
reasonable time in order to allow the daughter to pass her Bar
examinations. The judge based his decision on the fact that he
thought it inconceivable for the daughter to give up a lucrative job
without an existing enforceable promise for financial support.
However, with the lapse of five years and given that she had still not
passed the examinations, he maintained that the contract had come
to end. His Lordship observed that the second agreement was so
ambiguous and uncertain that it could not be described as a
contract. There was nothing in the second agreement nor was
there available evidence to suggest that the mother
intended to renounce her right to possess her house and use
it as she pleased.
Commercial [Link] commercial agreements,there is a
presumption that there is an intention to create a legally
binding relationship,which may be rebutted with strong
evidence. One of the ways of rebutting this presumption is by
including an express statement indicating that the agreement is not
to be binding in law. Jones v Vernom’s Pools Ltd9,the plaintiff
attempted to claim money which he alleged had won in a football
pool. Each coupon contained words, ‘Binding in honour only’. The
court held that the words were sufficient to rebut the presumption
and the plaintiff’s action would fail.
In conclusion therefore,agreements between parties may result in
legally binding relations depending on factors such as the conduct
of the parties and the circumstances of each case as discussed
above.

Reference.
Proffessor Ben Kiromba Twinomugisha Principles of Law of Contract
in Uganda 2018

9
[1938]ALL ER 626