In order to make an enforceable contract, it is not necessary that the parties should consciously advert to legal relations, but it is necessary that they should not express an intention to exclude legal relations.
In this Court in Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1] , Dixon C.J., Williams, Webb, Fullagar and Kitto JJ. in a joint judgment spoke of "a principle which is fundamental to any conception of contract", saying, "It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty". I venture to say, despite some statements in other cases, that whether there was a voluntary assumption of a legally enforceable duty in a particular case is not to be decided by asking whether or not the parties had expressed or exhibited an actual and positive intention that their agreement was to result in legal obligations. It depends rather on an inference to be drawn from the subject matter and nature of their agreement, and other circumstances to which I referred in what I wrote in South Australia v. The Commonwealth [2] , which I refrain from repeating. Social engagements and domestic arrangements are outside the realm of contract law, simply because the parties to them must be regarded as intending that their mutual promises, whether kept or broken, are not to land them in Court. The principle has been extended in England to arrangements not involving purely social engagements of an ordinary character, but which were nevertheless taken to have been intended by the parties not to create obligations enforceable by law: e.g., Coward v. Motor Insurers' Bureau [3] . Agreements made between an individual and the Government are sometimes said to be in the same position. But I think that they are outside the class of legally enforceable contracts for a rather different reason. There is there a reflection of the rule that historically promises made by Government were not justiciable and enforceable against the Crown by the ordinary processes of an action at law. This is not because they are not obligations meant by the parties to be binding, or which are not "binding in moral equity and conscience", but historically they "want the "vinculum juris" ", to use the expressions which Tindal C.J. used in the old case of Gibson v. East India Co. [4] . But in Australia today these considerations have disappeared. The Commonwealth can sue and be sued in the courts in ordinary actions in contract and in tort. In the present case it seems to me unnecessary to ask whether the Commonwealth and the plaintiff intended the Agreement to create legal rights and obligations. I think that obviously they did. But proof of a common intent seems to me to be not required. Parliament's approval of the Agreement and the appropriation by Parliament of funds to meet it, when added to its essentially commercial character and its language, are enough I consider to rescue it from the unenforceability which a purely political arrangement has, and to give it a contractual character. It is worth noticing that in the Australian Woollen Mills Case [1] , where the opposite conclusion was reached as to the subsidy scheme there in question, the Court said [2] :
If there was an intention on the part of the Government to assume a legal obligation, one would certainly have expected statutory authority to be sought.
Here it was sought and given.
1. [1919] 2 K.B. 571, at p. 578.
2. [1923] 2 K.B. 261, at p. 293.
3. [1969] 1 W.L.R. 328.
4. [1969] 1 W.L.R. 339.
5. (1954) 92 C.L.R. 424, at p. 457.
6. (1962) 108 C.L.R. 130.
7. [1963] 1 Q.B. 259, at p. 271.
8. (1839) 5 Bing. N.C. 262, at p. 274 [132 E.R. 1105, at p. 1110].
9. (1954) 92 C.L.R. 424.
10. (1954) 92 C.L.R., at p. 461.