There is nothing in writing so I don’t have a contract, do I?
08/03/2017 | ACUMEN BUSINESS LAW
A contract does not need to be in writing and can be formed by a verbal agreement or implied from the conduct of the parties. A contract is formed when the following key elements coincide:
• Intention to create legal relations
• Certainty of terms
An offer is a promise by one party to enter into a contract on certain terms. It must be specific, complete, capable of acceptance and made with the intention of being bound by acceptance. Therefore, an offer must contain the basic terms of the agreement and evidence an intention that no further bargaining is to take place. The general rule is that an acceptance has no effect until it is communicated to the offeror. This is the point at which the contract comes into being. This communication can be verbal or by email. Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. In English law an intention to create legal relations is presumed in commercial situations unless it has been rebutted in some way by one of the parties. For a binding contract to exist, and to be enforced, the terms must be certain. Parties must ensure that their agreement is complete, that is, not lacking in some essential term and that it is not otherwise uncertain, vague or ambiguous.
If any one of the key elements is missing, there will be no contract in effect. However, if all the elements are present, whether or not in writing, a contract will have been formed.