When Is A Contract Legally Binding?

What is a contract?

The definition of a contract is a legally binding, and enforceable by law, agreement made between two or more parties. In cases of dispute when the parties are arguing whether a contract, or fundamentals of it, have been broken, it may be required to take the case before the courts. This allows the judgement to be made about whether there has been a “breach of contract”. The judges will have to look at certain criteria before deciding whether or not a contract has been breached and is enforceable.

The 4 crucial elements of a Contract:

 

Offer:

In the contract there must be a definitive and clearly stated offer to do something. E.g. a quote to offer a lease. There will be a time frame usually written into the contract. It has to be precise, an offer does not include estimates, proposal requests, expressions of interest, or letters of intent.
An offer will lapse: – when the time for acceptance of the offer expires or if the offer is withdrawn before it is accepted; or after a reasonable time in the circumstances (usually the greater the value of the contract, the longer the life of the proposal).

Acceptance:

Only what is offered in the contract can be accepted. The terms and conditions of the proposal must be accepted exactly as they are proposed in the contract. If prior to an agreement any new terms are suggested, this is regarded as a counter offer which can be accepted or rejected. This may occur a few times before an agreement is reached and accepted. It is irrelevant who makes the actual final offer; it is the acceptance of the proposal that brings all the negotiations to an end by establishing the terms and conditions of the contract.
Acceptance may be given in writing, verbally or inferred by action which clearly indicates acceptance (performance of the contract). Whatever the circumstances the agreement must conform to the method accepted by the offerer for it to be effective and legal.

Intention of legal consequences:

A contract necessitates that the parties involved are intending to enter into a legally binding agreement. All parties must acknowledge that they are obliged by law to adhere to the contract and that the agreement can be enforced by law. The intention to create legal relations is recognised by all, so the contract doesn’t have to state that you understand and intend legal results to follow as this is presumed upon entering the contract. If all the parties to a contract agree and determine that the contract is not to be legally bound, this must be clearly stated in the contract for it not to be legally enforceable.

Consideration:

In order for a contract to be binding it must be reinforced by valuable consideration. That means one party promises to do something in return for a promise from the other party to provide a benefit of value (the consideration). The consideration is basically a trust agreement between the parties as the agreed price for the other’s promises. This is usually accepted in monetary values, but isn’t always; it can be anything of value including the promise not to do something, or to refrain from exercising some right.

The Terms and Conditions:

If, for any reason, there is a dispute over a contract, it is brought to the courts to be dealt with legally then the courts will have to look in detail at the terms and conditions that surrounded the contract. A contract cannot be said to be complete if the terms and conditions were unclear. However, it needs to be recognised that every court case is unique, and a judge may have to try to clarify the exact terms and conditions linked to the disputed contract, rather than a simple decision on whether the contract has been broken or not.

“Breach of Contract”:

A breach of contract occurs when one of the parties in the agreement fails to fulfil one or more of the specified terms and conditions. A violation can also be determined if some agreed work carried out is malfunctioning or sub-standard; or if one party has not carried out the agreed work. This is then placed in the hands of the law where a judge will determine if the contract has been breached and damages may be awarded to one of the parties.

The law relating to contracts can be comprehensive and complex, serious consideration should be given before taking any legal action. Harold stock & Co have specialised qualified solicitors who are confidently able to advise and guide you. We assure you that all work is confidential and we will advise you without any misconception of an outcome.

Contact us on info@haroldstock.com  or 01457 835597.

18 Responses to “When Is A Contract Legally Binding?”

  1. If a contract has been written up by an employer for a full time position, yet has not been signed by the employer and the potential employee is it still legally binding, and would it stand up in the eyes of the law?

    Thank you

  2. Chris Jenkins

    Good evening. I appreciate this is perhaps a long shot. I signed a tenancy agreement with 3 fellow housemates in June, but the letting agent didn’t sign the contract at the time as they hadn’t received a reference for one of the tenants. They said they would sign it and send it to us once they received the reference. Regardless, we moved into the property on 1st July but haven’t ever received the contract or heard any more about it. Is this contract valid and do I have a chance of getting out of the contract based on having never received a signed copy?

  3. On of my friends brought a vehicle for my company and signed a contract stating that in the event of a disagreement or her death the vehicle would remain with my company. This was signed by both parties. She is now stating 5 months along that the contract is not a legal contract. Can someone please help?

  4. Richard

    3 months of email negotiating buying an established business as well as starting a new business. All emails. There has been intent to move forward, but nothing has taken place as of yet. No contracts signed, just verbal intent & email intent. I found it taking too long, so I went with another investor. Does the original investor have any rights here? And what are they?

    Thank you!

  5. George Cobb

    I was looking for some advice. I have recently agreed to test drive a car based on an offer made by a garage. The offer “CHOOSE YOUR COMPLIMENTARY GIFT ONCE YOU REGISTER FOR YOUR APPOINTMENT!” did not mention any terms or conditions indeed when I signed up and there was no tick here box to accept t&c’s etc. However at the bottom of the email there is a * and some t&c. My question is am I bound by the t&c’s ?

  6. Hi I’m looking for some advise. I have been offered and sent a contract for an employment that starts in a few weeks time. However I’m hoping to hear back from other potential jobs before signing this contract. At the same time I don’t want to lose the offer of the job incase I’m not successful with the other applications.
    If I sign and send back the contract of employment is that legally binding from the moment they receive it and therefore I must work for them, can I sign it and if I get another job offer I can change my mind?

  7. If you offer a service on Facebook agree date time and your running late you inform customer 2 hours before they are rude to you.
    You cancel the deal due to unreasonable behaviour. Are we entitled to do this?
    They are also posting about your buisness over Facebook groups and being nasty is this slander or legal to do so?

  8. If we have a buisness on Facebook and agreed a time and date to collect item, but we’re running late due to another job told customer 2 hours before hand and she was extremely rude about it was we in our rights to cancel?
    Also she has now put up out buisness all over Facebook as do not trust plus nasty comments with a picture of our buisness is this slander or legal?

  9. Jade Gardner

    I moved into a house with this guy who also signed the year lease to cover rent expenses. I also made a written contract stating we are both responsible for paying this much per month for rent on the property as well all utilities as well as Internet charges, adding up to this amount to be paid by each tenant until the lease is up on this date. The tenant x also will owe tenant y this much money for the cost of utility transfer fees, plus the utility bills for the first month we had moved in. He is now refusing to pay anything and states only the landlord can take him to court, and I can’t do anything about it. However tenant x and y both signed and dated the written contract. I was wondering if my written contract would be legally binding or not? I did a bit of research and I’m coming to tf conclusion thst is in fact legal and tenant x must comply or face disciplinary action by the state courts. Please someone help me.

  10. Terry Winstanley

    I recently had a statement from a catalogue company saying I only owed £16.87 including buy now pay later deals, now suddenly the company have said I owe them £259 plus they have had the extra cheek to put a late payment fee of £12 on my account, they are saying that I owe more because of buy now pay later, as they say i only owe £16.87 including buy now pay later is this all I legally owe them? They are trying to tell me there was another buy it now item but they are telling me that their copy of my statement does not say inc buy it now pay later items, they even have the sick cheek to put a £12 late payment charge on top of the other £259 when I was not expecting any further payments at all regarding this account.

  11. Person A gave a van and signed title to person B, person B had the van for 2 years without ever registering the van nor signing the title that they had possession of van… person B then turned around to sell the van to person C yet person B NEVER signed the title, a hand written note was signed by person B and C stating payment due by this time, no witnesses signed no stamp of notarized document! Person C went to currency exchange and was made to sign date of purchase as the date person A originally signed over title and van is now in person C name! Person C was NOT aware or notified of all the life altering problems with the van that could’ve killed someone, nor did person B care if person C got in trouble for the van not registered for 2 years. Now person B is harassing person C for money yet nothing states that they EVER had possession of the car to even sell to anyone. I read that since person B NEVER signed the title and is NOT a licensed dealer it was illegal for the van to be sold by person B. Is this true? Is the very brief hand written note a valid legal document? Is person B required payment? Please help!! Thank you!

  12. If I brought a house after I got married can I get my wife to sign a contract to give up any right to the house as long as she can keep the furniture in the house? We broke up 2 months ago.

  13. I recently signed a contract to rent a house. I paid the bond and the first month rent before the contract was due to start. However, my circumstances changed and I am no longer able to pay coming payments. I only initialled each page, not signed and I wasn’t given a copy of my contract. Nor was the terms and conditions shown to me. I assumed I had and 14 day Cooling off period, but as I don’t have any documentation, or reciepts I don’t know how to cancelebrate legally. Is the contract still binding if I was not given a copy of the contract? I am concerned some pages may be changed. Thanks.

  14. Sharon Beall

    My granddaughter is working for a lady and she is wanting to go to another salon and in her contract is a claus that she cannot work for another salon within a 15 mile radius of the salon she is working at now for 2 years. The salon has moved since she has signed that contract and she never signed another one with the new address so is that contract still valid?

  15. Alexandra

    I started a training with a company, the contract stated that I have to pay 280 pounds before signing the contrace but I signed without paying because I had a feeling the company could not fulfill what they said they offer. After two weeks of attending I paid 200 pounds from the 280 pounds contract fee but along the line there was a particular course I was interested in which was why I applied, now the company says they don’t do that course and are denying that they told me they offer such course but am 100% sure I was told they offered that course so I stop attending. They said if I stop, I still have to make the full payment for the course, which I feel is wrong. Can I stop without making the full payment.

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