Formation
There are six essential elements necessary for legally binding contract formation: (1) an agreement (offer and acceptance); (2) consideration (generally, the supply of money, property or services however anything will suffice as consideration be it money, or a promise to undertake, or not undertake a particular act); (3) Capacity to enter legal relations. E.g. Of sound mind and legal age (4) Intention by the parties to enter into legal relations (private non-commercial agreements between family members may not necessarily constitute a contract as intention to create legal relations is often not present) and (5) Formalities - In most jurisdictions contracts do not need to be represented in writing however exceptions apply. (6) Certainty.
The foundation of the legal relations called contract is the agreement of the parties. In order for an agreement to be a contract (or a variation to an existing contract) it must be supported by consideration. The agreement must also be sufficiently certain and complete to be enforced in the courts and the parties must have intended their agreement to be a contract. The absence of any of these elements will signify either that there is in law no agreement or that the agreement is not enforceable as a contract.
Read more about this topic: Australian Contract Law
Famous quotes containing the word formation:
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