What is a contract?

Jul 6, 2023 | Publication

In simple terms, a contract is a legally binding agreement between two or more parties.

A contract can be in writing or verbal.

For a contract to be reached between parties there must be an offer and acceptance, an intention to be legally bound and consideration.

For instance, an agreement between relatives or friends may not have the necessary intention to be legally bound (thus the importance of obtaining legal advice and documenting such agreements).

To enter into a contract the parties must have legal capacity.  For instance, a contract with a minor may not be legally enforceable.

Contracts can be governed by both the common law and also by statute.


For instance, the Australian Consumer Law implies a number of guarantees into certain types of contracts – for instance, fitness for purpose and acceptable quality.

Terms in a contract that purport to exclude certain statutory provisions can be void.

To discuss your legal needs please contact our office on 1800 180 500 or email reception@mcauleylawyers.com.au

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