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Are we in agreement for a legally-binding contract? Lesley Purveur, of Larken & Co Solicitors, Newark, reveals all

Many of us are unaware that we enter into legally-binding contracts almost every day.

The simple act of purchasing food from a shop is a legally-binding contract between shop owner and consumer, as is a simple agreement to have someone cut the grass in your garden for some form of payment.

Sometimes, however, what appears to be an agreement is not, in fact, binding, for example because it is incomplete, or its terms are uncertain, or perhaps because the necessary contractual intention is lacking.

Conversely, a binding agreement might be reached despite appearances to the contrary, for example, where a party commenced work before any formal agreement was signed.

Disputes can arise when one party decides not to honour one or more terms of the agreement.

Lesley Purveur, of Larken & Co Solicitors, Newark, looks at the requirements for a legally-binding contract, how the law stands on verbal agreements, and how to get out of a legal contract without being sued.

Lesley Purveur. (41841929)
Lesley Purveur. (41841929)

What makes a contract?

There are two basic rules to the formation of a legal contract: offer and acceptance.

By setting out the terms and conditions of offer and acceptance, a legally-binding contract has been made. If the contract is broken or breached, then the law can be used to enforce it.

Two other essential factors are consideration and intention.

Consideration is usually the exchange of something, such as wages for work. Intention is where both parties make a contract with the intention of that contract to be legally binding.

There must also be certainty of contract, which means that to be legally binding, a contract cannot be vague or ambiguous.

Are verbal agreements enforceable?

In the eyes of the law, verbal contracts are just as legally binding as written ones and can be upheld by a court if someone decides to breach the agreement although, admittedly, without written terms and conditions, they may be difficult to prove.

A verbal agreement will be binding if there was an agreement on the services to be provided, and an agreement was reached on remuneration for this service.

There are certain contracts and agreements that must be made in writing, including the sale of property, tenancy agreements, copyright transfer, and contracts for consumer credit.

Can I get out of a contract without being sued?

You must have a valid legal reason to get out of a contract without being sued, otherwise there could be dire consequences.

Some contracts contain unfair terms that are not legally binding. Others contain early termination clauses. These tend to include employment agreements and property leases. Such clauses allow parties to end an agreement early by giving proper notice.

There may be certain obligations or penalties that need to be met for ending the contract early, but so long as these are adhered to, early termination can take place.

There is also the possibility of terminating a contract early if the other party does not live up to their part of the agreement. Note any areas where a party may be in breach. If a mistake was made in entering into the contract, or if it is based on misrepresentation of facts or fraud, you can void the contract without being sued.

If you can no longer perform your obligations due to a particular circumstance or event, a contract can end.

Contracts can also end through negotiation. This can be done in writing, or face to face, both of which such be conducted on a ‘without prejudice’ basis.

Recommendations can be made to present a mutually agreeable resolution without involving the time and expense of the courts.

Contracts are an integral part of everyday life. The laws that are set out regarding legally binding contracts help protect parties.

For more advice in relation to contracts, their formation, or any issues in relation to terms, contact Lesley Purveur on 01636 703333 or lesley.purveur@larken.co.uk or visit www.larken.co.uk

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