Are you in an enforceable contract? Learn how to avoid a breach

Sometimes people enter into contracts in their day-to-day lives without realising it.

For example, entering a car park when passing by the sign with the terms and conditions on it. The simple act of entering a car park means you are technically entering into a contract with the car parks operator and agreeing to the terms and conditions provided for upon entry. If you do not comply with the terms and conditions of the carpark, you may be breaching your obligations.

What is a contract?

A contract occurs when two or more parties enter into an agreement. They can come in all shapes and sizes, such as verbal or written.

What is involved in establishing a contract?

Prior to identifying a claim for breach of contract, it must first be established whether a legal and valid contract was in existence. For it to be valid, there are a number of factors that must be established:

1. An offer must be made by one party to another to enter into the agreement; and
2. The offer and terms of the offer made must be accepted; and
3. Consideration must be given, in that the contract provides for value to be passed between the parties involved in the contract; and
4. The parties must have capacity to enter into the proposed agreement; and
5. The proposed contract is legal.

What constitutes a breach of contract?

1. The parties entered into a contract that was legally binding and valid; and
2. The party alleging a breach of contract, met their obligations set out in the agreement; and
3. The alleged breached party did not meet their obligations set out; and
4. The party alleging a breach of contract has suffered a loss and/or damage as a result of the breach; and
5. There is evidence to substantiate the breach and loss.

CASE STUDY

Ermogenous v Greek Orthodox Community of SA Inc High Court of Australia (2002) 209 CLR 95

The issues set out in the above case centered around whether the parties to the contract had an actual “Intention to create legal relations”.

In this case, the Archbishop Spyridon Ermogenous made a claim to obtain annual leave as well as long service leave although the Greek Orthodox Community disputed this, claiming there was no intention to enter into a contract. This case explored the notion when looking at a parties intention to enter into a agreement, the courts should consider the actual intentions of the parties, rather than making presumptions.

The High Court found the agreement made between Archbishop Spyridon Ermogenous and the Greek Orthodox Community was in fact legally binding and the Archbishop was entitled to the leave claimed.

This case demonstrates the importance of establishing the intention of the parties when considering whether a contract has in fact been entered into.

Need Advice?

If you are unsure whether you have entered into a contract or believe you or another party may have breached an agreement, our professionals here at Greenhalgh Pickard can help. Call our office today.

Disclaimer:

The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation. 

Greenhalgh Pickard’s Litigation Team