Forming enforceable contracts—the court's general approach
Forming enforceable contracts—the court's general approach

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Forming enforceable contracts—the court's general approach
  • The essential ingredients of an enforceable contract
  • The general principles in determining whether a binding agreement has been concluded
  • Was an enforceable agreement reached—the value of a written record
  • Incomplete agreements and those 'subject to contract'
  • Findings alternative to there being a binding agreement
  • Can an undertaking to the court be a binding contract?
  • Practical considerations

Note: this Practice Note is concerned only with the creation of binding legal relations by way of contract (whether in writing or orally) and is not concerned with those arrangements which require to be made by way of deed in order to be valid, on which see Practice Note: Deeds.

Although many will be familiar with the key requirements for a finding of a contractually binding agreement, such as offer, acceptance, consideration, certainty etc (see: Forming enforceable contracts—overview), it is helpful to understand the court's general approach in this respect and how it ties in those key requirements.

The essential ingredients of an enforceable contract

The essential ingredients for establishing the existence of an enforceable contract are:

  1. offer and acceptance

  2. consideration (unless the contract is one executed by deed)

  3. an intention to create legal relations (ie an intention to be legally bound)

  4. certainty

There is much more to the statement of these broad principles, as can be seen in our detailed Practice Notes on these concepts:

  1. Forming enforceable contracts—offer

  2. Forming enforceable contracts—acceptance

  3. Forming enforceable contracts—consideration

  4. Forming enforceable contracts—intention

  5. Forming enforceable contracts—certainty

There are also additional considerations, eg, involving capacity and authority; and contracts can take many forms: oral only, written only, mixed oral-written; contracts on standard forms etc.

Even where the above ingredients appear present there may yet be issues as to matters of interpretation, what exactly did each party

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