FORMING CONTRACTUAL AGREEMENTS
FORMALITIES
⇒ Some contracts require deeds: a formal and written document that has been signed e.g. a
contract for the sale of land requires a deed under section 2(1) of the Law of Property
(Miscellaneous Provisions) Act 1989.
⇒ However, most contracts do not need any formalities (i.e. they need not be written/signed, etc.).
All that is needed is an agreement.
⇒ An agreement means a meeting of minds.
⇒ An objective approach is taken by the courts when determining if there was an agreement by the
parties to a contract. In other words, the court will take the "reasonable person's" point of view and
determine whether he/she would believe there had been an agreement.
OBJECTIVITY
⇒ The court does not always use the same type of objectivity.
⇒ Types of objectivity:
Promisor objectivity: the intention of a reasonable promisor.
Promissee objectivity: the intention of a reasonable promisee
Detached objectivity: the 3rd party view of a situation.
⇒ For example, in Smith v Hughes (1871), there was a contractual dispute about the type of oats
contracted for. Promisee objectivity was used by the court: what would the reasonable person,
receiving the promise, intended to have agreed to?
EXTERNAL SIGNS OF AGREEMENT
⇒ 1) Offer;
⇒ 2) Acceptance;
⇒ 3) Consideration;
⇒ 4) An intention to create legal relations.
⇒ So where there is an agreement these four elements will be present.
1) Offer
WHAT IS AN OFFER?
⇒ An offer is where one party shows that he/she is happy to contract with another party (or more
than one party) on fixed terms (or terms that are able to be fixed) at that specific time.
In other words, the court is trying to find a willingness from a party (e.g. a communication in writing
or orally) to contract on specific terms.
FORMALITIES
⇒ Some contracts require deeds: a formal and written document that has been signed e.g. a
contract for the sale of land requires a deed under section 2(1) of the Law of Property
(Miscellaneous Provisions) Act 1989.
⇒ However, most contracts do not need any formalities (i.e. they need not be written/signed, etc.).
All that is needed is an agreement.
⇒ An agreement means a meeting of minds.
⇒ An objective approach is taken by the courts when determining if there was an agreement by the
parties to a contract. In other words, the court will take the "reasonable person's" point of view and
determine whether he/she would believe there had been an agreement.
OBJECTIVITY
⇒ The court does not always use the same type of objectivity.
⇒ Types of objectivity:
Promisor objectivity: the intention of a reasonable promisor.
Promissee objectivity: the intention of a reasonable promisee
Detached objectivity: the 3rd party view of a situation.
⇒ For example, in Smith v Hughes (1871), there was a contractual dispute about the type of oats
contracted for. Promisee objectivity was used by the court: what would the reasonable person,
receiving the promise, intended to have agreed to?
EXTERNAL SIGNS OF AGREEMENT
⇒ 1) Offer;
⇒ 2) Acceptance;
⇒ 3) Consideration;
⇒ 4) An intention to create legal relations.
⇒ So where there is an agreement these four elements will be present.
1) Offer
WHAT IS AN OFFER?
⇒ An offer is where one party shows that he/she is happy to contract with another party (or more
than one party) on fixed terms (or terms that are able to be fixed) at that specific time.
In other words, the court is trying to find a willingness from a party (e.g. a communication in writing
or orally) to contract on specific terms.
