Contractual Agreement

At its most basic level a contract is a legally binding agreement so that a simple contract requires consideration whereas a contract by deed does not. In order to determine whether an agreement has been reached in a simple contract the court will look at a number of matters such as: offer and acceptance, certainty and completeness, consideration and whether the parties intended to create legal relations.

It can sometimes be difficult to determine if there is an offer by one party and acceptance by another. These types of problems often arise where various standard forms are exchanged between the parties and there is conduct that suggests the parties thought a contract was formed. The court have overtime developed various theories to help them determine questions about offer and acceptance where these theories include: the last shot theory, the higher status theory and the global synthesis/theory.

If you need help in determining whether or not an agreement has been reached please contact us so we can assist you with this issue.

Potential Scenarios - Lack of Contractual Agreement Disputes

  • In a world of standard forms parties typically exchange offers on the basis of their business' forms, and where different standard contractual terms are used there can be a dispute about whose terms were accepted;
  • There is more often than not a series of offers and counter offers so that it is seldom clear whether there was neat offer and acceptance leading to arguments about what the deal was or was not.

Important Quotes in Offer and Acceptance Cases

Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (Court of Appeal) (11/11/88) . The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract: cf Baltimore and Ohio RR Co v US 261 US 592 (1923); Fincke v US 675 F2d 289 (1982). Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances. - Integrated Computer Services Pty Ltd v Digital Equipment Corp Aus Pty Ltd (1988) 5 BPR 97 326 at 11,117 referred to in Zambito Pty Limited v Buradoo Pty Limited [2011] NSWSC 284


Let Us Help You

  • Consider the relevant chronological events in your dilemma;
  • Assess whether there is a neat offer and acceptance leading to a contractual agreement;
  • Look at the scenario objectively to see if in the totality of the events there is a contract;
  • Apply the last shot theory, higher status or global synthesis theory depending on your circumstances.

* This content does not purport to give legal advice. Readers must obtain their own legal advice, that applies to the particular circumstances of their case, before taking any action at all.