You can ask our online solicitors for advice contracts using the question box on the front of our website or the following free legal advice guide may answer your questions.

To understand contract law properly, it is important to explore and recognise the term contract and what this means in different contexts.

In the simplest form, a contract is something that is agreed between two or more people. Each agreement will contain terms or ‘promises’ that each side intend to keep and where the agreement is legally binding, are enforceable under the relevant legislation.

Any agreement will begin with an offer of some sort and this will form the basic framework of the agreement. The other party must be in agreement both with the offer and the promises made. For an offer to stand, it must be communicated in some way, so you couldn’t say that an offer existed if the other party had no knowledge of it.

In most instances you can substitute contract for agreements and vice versa.

The ABC of Contracts

The laws surrounding contracts relate to a series of rules that determine the agreement, validity and relationship within an agreement between two or more people.

A agreement can be made between individuals, businesses, institutions and more and it can relate to the provision of products or services in exchange for something of value such as ownership or interests. While this doesn’t cover every facet of what agreements cover, these are the main areas that are used in contract law today.

Three things must be present for an agreement to be valid. The first of these is an agreement, the second is an intention to establish a legal connection and the third is consideration.

The only exception to the third one is if the contract is created through a deed. Although each of the elements should be fulfilled separately, they should in the context of a agreement be dealt with together. In all business dealings, it is considered that all contracts aim to establish some form of legal relation.

Contract Information

A agreement is formed when the offer has been accepted. From that moment on, the contract will be established, although it may be another date at which the agreement becomes legally binding, usually once it’s been signed and exchanged by all parties.

If an offer is conditional, the agreement will commence when a certain condition is met, unless there is an alternative agreement to say otherwise. Acceptance can take place either through conduct or words.

Enforcment

For a agreement to be enforced it must include certainty through its terms. For an agreement to be dealt with as a contract it must be obvious what the terms of the contract actually are.

If an important term is not negotiated and settled, the agreement cannot be considered as a contract. If certain terms require additional agreement or negotiation if they are not sure about the agreement, then the contract cannot be enforced.

If there are two agreement and the terms differ because no consensus can be reached, the contract cannot be created.

When a court looks at a agreement, they cannot and will not create the terms because this would effectively impose a agreement upon all those involved. There may be occasions when the court will either infer or imply a particular term, specifically when one of the parties relied upon some kind of agreement.

It may be that the agreement itself offers a kind of mechanism to create a term.

Illegal or Voidable Agreements

If a contract is created but it’s illegal, then it can never be enforced by any tribunal or court. Furthermore, if the agreement is for an illegal purpose, it will be deemed void and cannot be enforced either.

A misrepresentation or mistake in a agreement can also make it voidable. Where assets are transferred using an illegal contract, usually they cannot be recovered. It is also important to make the differentiation between a voidable contract and a void contract.

A voidable contract is one that cannot necessarily be annulled. A void contract on the other hand is not a contract because it is unenforceable by law.

As a general rule, the court will not enforce an illegal contract, but they can make a clear judgment between situations when the contract is for an illegal purpose or when the contract has been infringed by implementing the terms of the contract.

An innocent party who is not aware of any violation is not usually affected by the underhand or illegal actions of the guilty party. It could, in fact offer a suitable remedy for the situation.

All aspects of contract law are complicated. There are so many exceptions and rules that can be applied depending on the situation and context, it is strongly recommended that if you have any issue with a contract, you seek suitable legal advic