“The parties [at Balfour v Balfour] lived together in friendship. In such cases, their national agreements are generally not intended to establish legal relations. It is quite different when the parties do not live in friendship, but are separated or are about to separate. They negotiate with zeal. They do not rely on honourable agreements. It can be assumed that they intend to create legal relationships. Important: The law allows both national and commercial assumptions to be made about the intention to create legal relationships, to challenge (refuted) using evidence that shows that there were intentions to create legal relations, in a case of national agreement, or there was no intention to create legal relations in a commercial agreement. As far as social agreements are concerned, there is no presumption and the case is decided exclusively on the merits. It is considered that family agreements do not create legal relationships unless there is clear evidence to the contrary. The courts will reject agreements that, for political reasons, should not be legally enforceable.  Lord Atkin`s judgment justified the position that, with respect to national agreements, there is a presumption that they should not be legally binding.
The Tribunal decided that it could not take legal action against the promised maintenance payments, since it was, inter alia, a purely national agreement which it wished to make legally binding. Although many sources consider “social and domestic agreements” as a single class, it is preferable to consider “family agreements” as a separate class from “social agreements”, the latter not asserting a presumption and only applying to the objective test. In a more modern case, Jones v Padavatton, the court applied Balfour v Balfour by declaring that a mother`s promise to award compensation plus the use of a house to her daughter, provided she left the United States to study for the English bar, was not a binding contract. Business agreements sometimes use “honor clauses.” What does an honor clause in an agreement mean? In assessing each case, the courts applied certain presumptions to different types of contracts; Thus, it was generally assumed that national or social contracts had not been concluded for the purpose of creating legal relations and it was assumed that trade agreements had such an intention. However, the High Court of Australia recently indicated that presumptions should not be accepted when determining intent – in any event, intent must be demonstrated without the help of such presumptions. . . .