A husband enters into an agreement with his wife under which he promises to pay her an allowance and she to refrain from pledging his credit. Is it a valid contract?
No. it is not a valid contract, because there is no intention to create a legal relationship between husband and wife which is of domestic in nature.
As per Sec. 10 of the Indian Contract Act, one of the essential elements of a valid contract is that there must be an intention to create a legal relationship between parties. It there is no such intention to create a legal relationship on the part of both the parties, then there is no contract between them.
The facts of the case resemble the leading case Balfour Vs. Balfour, (1919) 2 K.B. 571, wherein the Court held that an agreement between the husband and the wife that the husband would send £ 30 to wife every month is an agreement of domestic nature, not creating any legal relationship and hence the wife could not legally enforce the agreement.