Tips on Contract Law

Tips on Contract Law

  • Post author:
  • Post category:Blog

A contract is an agreement made between two or more parties that is legally enforceable. Contracts can be written or verbal.

A contract arises when one party makes an offer and the other party communicates an intention to accept it. Only what is offered can be accepted. This means that the offer must be accepted exactly as offered without conditions. If any new terms are suggested this is regarded as a counter offer which can be accepted or rejected.

In Australia contract law is primarily regulated by the ‘common law’, but increasingly statutes are supplementing the common law of contract – particularly in relation to consumer protection.

Consumer law includes the law relating to consumer guarantees, unfair terms in consumer contracts, unconscionable conduct and manufacturers’ liability.

The four essential elements: 1) Offer, 2) Acceptance,3) Intention and 4) Consideration. The agreement will not be legally binding in absence of one of them. 

Is a Contract or Agreement valid if Undated?

That proposition has been confirmed in the English High Court in Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867, an undated agreement is not fatal to an agreement. Justice Lindblom said: “The absence of a date does not of itself invalidate a deed.”

What is your obligation?

In a decision of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 177 the High Court was at pains to indicate the importance of persons contracting with each other and the affixing of a signature. The Court remarked that, consistent with the objective approach to contracts, it is a matter of some significance when a person places a signature on a document, and in the absence of fraud or some other special circumstance, a person cannot escape the consequence of signing a document by saying that he did not understand it. The Court went on to observe that unless a person was prepared to take the chance of being bound by the document, whatever it might be, it was for the person to protect himself by abstaining from signing the document, until he understood it and was satisfied with it.”

What if you breach the Contract?

The principle in Robinson v Harman (1848) 154 ER 363 at 365, where Baron Parke said: “where a party sustains loss by breach of a contract, he is, so far as money can do it, to be placed in the same position, with respect to damages, as if the contract had been performed”.

In Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 251 ALR 322 at 336, Gummow, Hayne and Kiefel JJ observed that “ [a] breach of contract by one party gives the other party a right to recover damages for the breach”.