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Whilst most of us agree that a Contract is a written document, they do not always exist in a formal manner.  It is not uncommon for Contracts both short and long term to be negotiated verbally without ever being formalised in writing.  Whilst these can operate successfully, while relationships are flowing smoothly, they are a source of great uncertainty once disputes begin to emerge.  At some point in time, if a party or parties to the arrangement experience changes in their situation ie relationship; financial; inability to perform his/her implied duties under the contract or death then a raft of problems may arise.

The undocumented conditions of a verbal Contract often create uncertainty as to exactly what terms have been agreed between the parties and in the event of unresolved disputes the parties may find themselves in Court to determine the terms of the verbal Contract.

Some of the points that may be examined by the Court in determining judgement could be:

  • surrounding circumstances, which include the history of the relationship between the parties
  • the conduct of the parties both before and after the time of Contract, which in itself may be the means by which the parties manifested their agreement
  • the original intentions of both/all parties in agreeing to the terms of the Contract.  The Court will recognise a contract if it can be shown that by a certain point, the parties mutually agreed to a clear proposal which was intended to be binding

Ideally, parties should document the exact terms and conditions of the Contract noting their respective obligations and then commit them to writing before embarking on the arrangement.

Take note however that legislation precludes any verbal arrangement when proposing to transfer land and a written agreement is always required.

If you find yourself embroiled in a dispute regarding any implied/verbal or written Contract a member of our Commercial team at Attwood Marshall can help you to resolve the issues to achieve your best outcome.  Our advice is to act quickly before the matter is out of hand, however, we can easily assess your situation and the clearest path forward in an initial appointment.

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Charles Lethbridge

Charles Lethbridge

  • Senior Associate
  • Commercial Litigation
  • Direct line: 07 5506 8240
  • Mobile: 0421 885 195