Chapters

Must Contracts be in Writing?

Under common law principles contracts do not have to be in writing. Legislation provides that some contracts must be in writing or be evidenced by a written document. These include contracts involving interests in land (for example, sale, lease or mortgage) and all contracts regulated by consumer protection legislation.

If a contract is required by legislation to be in writing and it is not, or not sufficiently, then the contract may be void, voidable or unenforceable, depending on what the legislation provides. The contract may be unenforceable by one party (the supplier) but enforceable by the other (the purchaser), particularly under consumer protection legislation.

Under the law of restitution, it may be possible to recover a reasonable remuneration for goods delivered or services rendered even though the contract is legally defective for want of writing. This again depends on the drafting of the relevant legislation that specified a written contract.

However, even if writing is not a legal requirement, it is always advisable to have the terms agreed between the parties written down and attached to, or kept with, any other relevant papers; for example, copies of quotations, brochures, pamphlets, that were supplied at the time the contract was entered into. Receipts for money paid should always be kept. If a dispute arises, these documents may assist in resolving differences between the parties. For example, a private purchase and sale of a car does not have to be in writing but it is a good idea to record the essential terms of the transaction.

A written contract can be drawn up by listing all the terms agreed between the parties and getting each of the parties to sign and date the document at the end.

We have seen that contracts do not have to be in writing unless legislation provides otherwise. Or the parties may choose to use a written document. If a written contract is used, it is very common that it is required to be signed.

When a contract is in writing, the general rule is that a party is bound by all the terms set out in a contractual document if he or she has signed it. This applies whether or not he or she has read the terms or understood them. The exceptions to the general rule are mistakes as to the nature of the document and misleading statements.

Unsigned Contracts - ‘Ticket’ Cases

We have seen that not all written contracts are supposed to be signed. An example is an airline ticket or a public car park docket, or a dry cleaning ticket. The terms may be on a ticket or may be displayed on a sign or wall. The customer is taken to have agreed so long as the customer had an opportunity to read the terms and did not object to them. This rule means that the terms must be available for scrutiny before the contract is made. The rule takes little account of the fact that no-one actually reads the terms or would have almost no time to read them if he or she tried to. Some allowance is taken of this if an exclusion clause is in a ticket.

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