Merritt v Merritt

Submitted by
Tanya Singh - 23GSOB2010508
Navkirti Sharma - 23GSOB2010361
Rishabh yadav - 23GSOB2011246
Astha choudhary - 23GSOB2011253
Gaurav bhalla - 23GSOB2010566
Course - MBA Section - 15
Concept
The case of Merritt v Merritt (1970) established that the signing of an agreement creates legal relations between
married couples.

The case involved Mr and Mrs Merritt, who married in 1941.

They jointly owned a house and Mr Merritt left to live with another woman. They signed an agreement that Mr
Merritt would pay Mrs Merritt £40 a month and eventually transfer the house to her if she kept up the mortgage
payments.

Mr Merritt argued that the agreement was a domestic arrangement and there was no intention to create legal
relations, so there was no enforceable contract. However, his appeal was unsuccessful. The court held that the
wife, Millicent Joan Merritt, was entitled to a declaration that she was the sole beneficial owner of the
matrimonial home.
The rule that applies in this case is that the court should hold all the parties of a contract liable to the terms of
the agreement. The test of contractual intention is objective, not subjective. What matters is not what the parties
had in mind, but what a reasonable person would think, in the circumstances, their intention to be.
Description
December 5, 1941. Rehearing Denied January 23, 1942.

Appeal from District Court, Gregg County; Earl Sharp, Special Judge.

Action by Loyd Elwood Merritt against Mrs. Elizabeth Merritt, brought on the theory that
a will of plaintiff's father naming defendant, plaintiff's mother, as beneficiary had been
revoked where such parents had been divorced. From the judgment, plaintiff appeals.

Affirmed. Hurst, Leak Burke, of Longview, for appellant.

Jack E. Price and Cecil Storey, both of Longview, for appellee.

Mr. Merritt left the family home to live with another woman in 1966. He agreed to pay Mrs. Merritt
£40 per month and transfer the house to her sole name if she kept up the monthly mortgage
payments.

Mrs. Merritt paid off the balance on the mortgage, but Mr. Merritt refused to transfer the property
to her sole ownership.

The court ruled that the agreement was binding because it showed an intention to create a legal
relationship. The element that converts any agreement into a true contract is "intention to create
legal relations". There must be evidence that the parties intended the agreement to be subject to the
law of contract.
Section
In the case of Merritt v. Merritt, section 1 of rule V of the court states that if the respondent does
not file their points and authorities, the cause may be submitted for decision upon the appellant's
brief. The court may then decide the case based on the statement of facts contained in the brief.

In the case of Merritt v. Merritt, the husband and wife were married in 1941. After the war, in
1949, they built a house in Hook, Chessington. The house was in the husband's name, with a
considerable sum on mortgage with a building society.

Mrs. Merritt paid off the balance, but Mr. Merritt refused to transfer the property to her sole
ownership. At the trial court, Mr. Merritt was instructed to transfer the property to Mrs. Merritt's
name.
Fact
A married couple built a house in 1949, funded with a mortgage and registered in the husband’s name.
They later agreed that the husband would transfer the house into their joint names. However, before this
occurred, the husband deserted his wife to live with another woman.

Afterwards, the husband agreed to pay the wife £40 a month, out of which she would pay the amount
outstanding on the mortgage (£180). She insisted that he sign a document stating that in consideration of
her paying the mortgage until it was paid off, he agreed to transfer sole ownership of the house to her.
The wife paid off the mortgage, at which point the husband reduced his maintenance payments to £25 a
month.

The wife attempted to enforce the agreement to transfer the house, arguing that a contract had arisen. The
husband denied this. He argued that the parties did not intend to be legally bound due to the domestic
nature of their relationship.
The record reveals that the parties were granted a divorce on October 16, 1987. The trial court subsequently
modified the custody provisions for the son of the parties on April 27, 1989, and on December 28, 1994. On the
latter date, the court modified the decree by granting sole custody of the minor child to the appellant (the father).
The trial court ordered, pursuant to the Oklahoma Child Support Guidelines, that the appellee (the mother) pay
$120.00 per month.

In 1996, the court further modified the custody provisions by terminating the parental rights of the mother. The
father asserts that the action to terminate parental rights was the result of the mother's failure to support their child
for over a year. The mother's pleadings assert that the 1996 judgment was obtained by default.The father alleges
in his application for an indirect contempt citation that the order for the payment of child support remained in full
force and effect. The application alleges that the mother failed to make payments beginning in March 1996, and
missed all but two months until he filed his application for contempt on January 31, 2000. He claimed that the
mother was indebted to him in the amount of $5,400.00 for child support, plus interest on that amount. The father
filed his application one day before the parties' son attained majority.
The court made these findings. Equity required the application of the equitable estoppel doctrine to the father's
claim for delinquent child support. The mother's disability, and the Social Security benefit payments of a lump sum
and monthly payment made in excess of the delinquent child support supported this decision. The mother was not
responsible for the payment of the lump sum directly to the adult child of the parties by the Social Security
Administration.

The journal entry of judgment stated that the father should seek reimbursement of the child support he sought in his
motion from his adult son by having a constructive trust imposed on the benefits paid to the adult son to the extent
of the unpaid child support while the child was a minor. The court granted the motion to dismiss the indirect
contempt citation and also dismissed the father's motion to reduce arrearage to judgment.
The facts of the case Merritt v Merritt are:
❖ Mr and Mrs Merritt married in 1941.
❖ They jointly owned a house.
❖ Mr Merritt left to live with another woman.
❖ They made an agreement that Mr Merritt would pay Mrs Merritt a £40 monthly sum, and
eventually transfer the house to her, if Mrs Merritt kept up the monthly mortgage payments.
❖ Mrs Merritt paid off the balance, but Mr Merritt refused to transfer the property to her sole
ownership.
❖ Mr Merritt contended the agreement was a domestic arrangement between husband and wife
and there was no intention to create legal relations and, as such, there was no enforceable
contract.Mr Merritt's appeal was unsuccessful.
Contention
In the 1970 case Merritt v Merritt, Mr. Merritt contended that the agreement between him and
his wife was a domestic arrangement and there was no intention to create legal relations. He
argued that the contract was insufficiently certain to be enforceable by the court of law.

The legal issue in the case was whether the agreement was legally binding. The law usually
has a presumption against these agreements between husband and wife being binding.

However, in this case, the couple had already separated when their agreement was being
made. In these circumstances, the parties did intend to be legally bound because they were no
longer in a domestic situation.

Mr. Merritt's appeal was unsuccessful.

Other arguments in Merritt v. Merritt include:

★ The agreement between the parties was a domestic agreement and there was no intention to
create legal relations.
★ The contract was insufficiently certain to be enforceable by the court of law.
★ Mrs. Merritt argued that given they were in the process of separating, the presumption of there
being no intention to create legal relations did not apply.
★ The husband arranged to pay 40 a month and transfer the property to the wife's sole ownership,
which shows an intention to create a legal relationship.
Judgement
In the case of Merritt v Merritt, the Court of Appeal ruled in favor of the wife. The court held that
the agreement was more than a domestic arrangement because the Merritts were separated when
they signed their contract. The court also found that there was sufficient evidence that the parties
intended to be legally bound.

The majority of the court held that the agreement was not intended to create legal relations due to
the element of uncertainty introduced by the husband's statement. However, Mr. Justice Stamp
found the agreement to be binding and dismissed the appeal.

The court held that the arrangement was sufficiently certain to be enforceable, and the paying of
the mortgage was ample consideration for Mr Merritt's promise. Mrs Merritt was entitled to the
matrimonial home entirely.
In all these cases the court does not try to discover the intention by looking into the minds of the parties. It looks
at the situation in which they were placed and asks itself: would reasonable people regard the agreements as
intended to be binding?
Counsel for the husband sought to say that this agreement was uncertain because of the arrangement for £40 a
month maintenance. That is obviously untenable. Next he said that there was no consideration for the
agreement. That point is no good. The wife paid the outstanding amount to the building society. That was ample
consideration. It is true that the husband paid her £40 a month which she may have used to pay the building
society. But still her act in paying was good consideration. Counsel for the husband took a small point about
rates. There was nothing in it. The rates were adjusted fairly between the parties afterwards. Finally, counsel for
the husband said that, under s 17 of the Married Women’s Property Act 1882, this house would be owned by the
husband and the wife jointly; and that, even if this house were transferred to the wife, she should hold it on trust
for them both jointly. There is nothing in this point either. The paper which the husband signed dealt with the
beneficial ownership of the house. It was intended to belong entirely to the wife.
Reasoning
In the 1970 case Merritt v Merritt, the court ruled that the agreement between the husband and wife
was binding. The court's reasoning was that there is no presumption against the creation of legal
relationships when a marriage is breaking up. The couple had already separated when their
agreement was being made, and in these circumstances the parties did intend to be legally bound.

The husband arranged to pay £40 a month and transfer the property to the wife's sole ownership,
which showed an intention to create a legal relationship. The husband also signed a note on the
agreed terms with his wife regarding the payments.

The husband contended that the agreement between them was a domestic agreement and there was
no intention to create legal relations. He also argued that the contract was insufficiently certain to
be enforceable by the court of law.
The common law does not regulate the form of agreements between spouses. However,
when the marriage has broken up, there is no room for the application of the presumption
against an inten- tion of creating any legal relationship. The presumption against the
creation of legal relationships does not apply when the parties are living happily together.
There is no presumption against the cre- ation of legal relationships when the marriage is
breaking up. In this case, the husband arranged to pay 40 a month and transfer the
property to the wife's sole ownership, which shows an intention to create a legal
relationship. Therefore, the agreement was binding.
Conclusion
The Court of Appeal in Merritt v Merritt held in favor of the wife. The court found that the
agreement was binding and that Mrs. Merritt was entitled to the matrimonial home. The
court's reasoning was that:
❖ The arrangement was sufficiently certain to be enforceable.
❖ The paying of the mortgage was ample consideration for Mr. Merritt's promise.
❖ The majority of the court held that the agreement was not intended to create legal
relations due to the element of uncertainty introduced by the husband's statement.
 Mr. Justice Stamp found the agreement to be binding and dismissed the appeal.
 When a husband and wife are in the process of separating, or are separated, the
presumption does not operate because in such a case the parties "bargain keenly" or
do not rely on "honorable understanding".
 The nature of the dealings, and the fact that the Merritts were separated when they
signed their contract, allowed the court to assume that their agreement was more than
a domestic arrangement.
Thank You