You may have heard or read the term ‘legally binding contract’, and it may well be that you have sought the advice of your commercial lawyer before previously entering into such a contract in relation to your business.
What the general assumption would seem to be amongst many people, including a lot of business owners, is that in order for a contract to be enforceable that it has to have been written. In other words, their belief is that verbal contracts carry no legal weight, and obligations given verbally are not binding on either party.
That may be the case in other countries around the world, but in Australia, a contract does not have to be in writing for it to be legally binding on all parties. Now, before we go any further, we have to point out that, as with all aspects of the law, especially commercial law, there are exceptions and caveats to what we have just said.
For a start, for any contract to be valid, there are certain elements that must be satisfied. These are: