Formation and interpretation

Contract formation

One of the first issues to consider when taking steps to put a contractual arrangement in place is to ensure there is a valid contract which is capable of being enforced. The Practice Notes in this subtopic consider the key elements for determining whether an enforceable contract exists, including:

•
offer
•
acceptance
•
consideration
•
intention to create legal relations
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certainty
•
capacity, and
•
authority

Offer

The Practice Note: Forming enforceable contracts—offer describes the characteristics of a legally binding offer to contract: an intention to be bound objectively assessed. It also considers offers versus invitations to treat, unilateral offers, heads of terms and offers ‘subject to contract’, as well as how an offer can be terminated by withdrawal of the offer, rejection of the offer, lapse of time terminating the offer or on the occurrence of a specified condition.

Acceptance

A contract will only be capable of being enforced if it has been accepted.

The Practice Note: Forming enforceable contracts—acceptance describes the characteristics of a legally binding acceptance to contract and considers how an offer can be accepted: acceptance of

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