Issue: Did the two parties have intentions to create a legal obligation to share any prize?
Laws
In the case of Balfour v. Balfour, the defendant was the complainant’s husband living at Ceylon by then. After the wife went to England, she was unable to come back due to her ill health. The defendant promised to pay N30,000 to his wife until she would return. However, the husband failed, and the money accumulated into arrears, after which the wife sued him. It was held by the court that the arrangement between the wife and the husband was just a promise, and it had no intention of creating a legal relation; hence it was never a contract. The plaintiff, therefore, never recovered the arrears.
In the case of Jones v. Padavatton, Mrs. Jones promised her daughter to further study as a lawyer where she was forced to move to another county and gave up her current job in New York. She, therefore, moved to London to enroll as a student. One judge held that the agreement between mother and daughter was legally binding since the daughter was seriously committed to the promise by the mother. Still, she breached the commitment by not continuing with it.
In Spellman v. Spellman’s case, where a husband bought a car via hire purchase agreement and registered it under the name of the wife. Later, the couple separated, and the husband was claiming the car as his own. The wife rejected the claim and sought to sue the husband. The court ruled out that the agreement never intended to form a binding legal contract between the wife and the husband, and hence the husband succeeded in the case.
Application
Based on the rulings of Balfour v. Balfour, the fact that the husband had promised to pay the fees to the wife out of good faith does not make the agreement to be legally binding. The courts provide that the agreement has to be intention between the two parties to enter into a legal obligation attended by legal consequences. In the case of Buddy and Peggy-sue, the two parties intended to enter in an agreement with a legal requirement that they must contribute equally towards the $10 lotto ticket. Buddy was so sure that Peggy-sue would give him the $5 even if he failed to do so on Friday.
In the ruling of Jones v. Padavatton, it was held by one judge that as long as the person has duly committed towards the agreement without breaching it, the contract remains to be legally binding between the two parties. From our scenario, it is clear that Peggy sue was committed to sharing the contribution of $5, and it was inevitable that he must contribute the money, which makes the agreement to be legally binding.
From the rulings of Spellman v. Spellman, the court considered the agreements among family members to be the same as those of friends. These social agreements, if there is no intention to create a legal obligation towards the contract, the contract is considered to be null and void. However, in this case, despite Peggy-sue and Buddy being friends, they both intended to create a legal obligation and were committed to the agreement.
Conclusion
Based on the above facts, it is so clear that Buddy and Peggy-sue intended to create a legal obligation in sharing the prize, and hence the $1,300,000 should be shared between the two parties.