The presumption that domestic agreements are not intended to create legal relations is ordinarily not rebuttable where the parties are living together in good relations at the time of the agreement. It is therefore unlikely that the court will enforce the agreement. Domestic agreements between spouses are generally presumptively unenforceable, especially if the parties are still living together amicably at the time of the agreement, as established in Balfour v Balfour [1919] 2 KB 571. In contrast, agreements intended to regulate the terms of the parties' separation, such as in Merritt v Merritt [1970] 2 All ER 760, are usually regarded as binding, particularly when the parties are estranged. Lord Denning MR distinguished these differing circumstances in Merritt v Merritt, stating that when parties are separated or about to separate, they bargain keenly and intend to create legal relations, unlike when they are living together in harmony.

Key Point: In English contract law, domestic agreements between spouses are generally presumed not to be legally binding unless there is clear evidence to rebut this presumption. This principle helps maintain a distinction between personal family arrangements and formal legal obligations, ensuring that only serious and formal agreements are enforceable.