Home > Contracts & Law > Legally Binding Contracts

Legally Binding Contracts

By: Garry Crystal - Updated: 21 Jan 2018 | comments*Discuss
 
Legally Binding Contracts

Although it is usually the wisest option, legally binding contracts do not just apply to contracts set out in writing. Under the eyes of the law verbal contracts are just as legally binding as written contracts. A contract is basically an agreement between two parties, for example, one party supplies a service and the other pays for it. Regardless of whether this contract is set down in writing or verbally it is still a binding contract under law.

Formation of a Contract

There are two basic rules to the formation of a legal contract; offer and acceptance. One party makes an offer or agreement to provide a service and the other party accepts the offer. By setting out the terms and conditions of offer and acceptance a legally binding contract has been made. If the contract is broken, or breached, then the law can used to enforce the contract.

Consideration and Intention

Consideration and intention are two other factors that make up a legally binding contract. Consideration is usually the exchange of something, such as wages for work with an employment contract. Intention is where both parties make a contract with the intention of that contract to be legally binding. These terms are used more in common law and may not hold any weight if a dispute reaches the law courts. If a dispute does reach the law courts then a judge will be looking closely at the terms and conditions of the contract in practice.

Legally Binding Contracts

Many people are unaware of the various ways that legally binding contracts can be set down. By far the best way of making a contract is for both parties to sit down and draft up a contract in writing with all the terms and conditions laid out. In today’s world there are many different forms of communication options, and emails, faxes, and telephone call agreements for exchange of services are all considered legally binding contracts. As long as an offer and acceptance is made or implied then any breach of contract can be legally disputed.

Unfair Terms of Contract

Although the contracts described above are legally binding, it does not mean that there is absolutely no way out of a legally binding contract. The terms and conditions set out in a contract are of paramount importance when disputes reach the legal courts. Where consumers are concerned, unfair contract terms and a lack of good faith on behalf of the trader may mean that the contract is not legally binding.

The basic rule as to what constitutes an unfair contract term is that there is a significant imbalance in the terms towards one of the parties’ rights and obligations. This imbalance will usually be detrimental to the consumer, and the trader will usually have shown a lack of good faith and will not have acted openly or fairly towards the consumer.

Types of Legally Binding Contracts

Many of us are unaware that we enter into legally binding contracts every day. The simple act of purchasing food from a shop is a legally binding contract between shop owner and consumer. Having dental work undertaken is a legally binding contract, a simple agreement to have someone cut the grass in your garden for some form of payment is a legally binding contract. Disputes usually occur when one person decides not to honour one or more of the terms of the agreement. There are certain contracts that under the law do need to be set out in writing; these will include contracts such as the sale of property, shares, and intellectual property rights.

Certainty of a Contract

If a contract issue does reach the law courts then there must be a certainty of contract. This means that for the contract to be legally binding it cannot be vague or ambiguous. The terms and conditions must have been clearly set out in fact and not just in principle. A judge may look at unclear terms and then try and clarify them but this will be dependant on the individual case appearing before the court.

Legally binding contracts are used by people every day. There are laws set out regarding legally binding contracts in order to protect both parties involved in the contract. Legal disputes can be long and costly, and breaching a contract is a serious matter that should never be taken lightly.

One interesting question is 'does a text message create a legally binding contract?'. Richard Brittle of Brittle Motors based in Stoke-on-Trent believes that it does. Over the coming weeks our leading in-house barrister will report on her findings which should make for interesting reading.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
I entered a lease contract l asked my solicitor about terms and conditions l have found out despite of my solicitor assurances there are terms that I don't agree with. Do l need to obeyed by terms of the contract despite that l was assured by my solicitor in writing that was not the case.
Abe - 21-Jan-18 @ 7:47 AM
Bryan - Your Question:
It said I can see my kids on these days and weekends and nothing else

Our Response:
Unless an agreement has been awarded through a court, then it is not legally binding and either party can renege on such an agreement. However, you can use it as evidence in court of how your ex is obstructing access.
ContractsAndAgreements - 12-Dec-17 @ 12:25 PM
It said i can see my kids on these days and weekends and nothing else
Bryan - 11-Dec-17 @ 8:59 PM
3 years ago i caught a felony assualt and misdemeoder assult .family violence... They were bogus charges from the ex and we got back together and she filed affidavit of non prosecution and they are now dropped... My question is we broke up 2 months ago and she wrote up a agreement on the days i can get my kids and we both signed it...so now last weel she tell me i cant see them till court... So is the agreement binding till then?
Bryan - 11-Dec-17 @ 8:57 PM
A legally binding contract can easily be entered into by the parties concerned signing a recognized standard form of contract?
Yamin - 2-Dec-17 @ 11:21 AM
My husband made an agreement that she would pay her money each month on what was owed him from his mom’s death. She agreed on an email that the balance would be paid off in Sept 2016. This was not stated on the promissory note so she says that she can just continue to pay each month. Is this right?
Nik - 16-Nov-17 @ 12:27 AM
Peng - Your Question:
I live in university accommodation (a room in a shared flat) due to a short-term switch in universities I agreed to a contract for a certain amount of weeks (45). But now I need to leave a few weeks earlier than expected. Can I get out of the contract if I hand in my notice 4 months before I need to leave and if not can I sublease my room?

Our Response:
You would have to read the terms and conditions of your tenancy agreement which will tell you what you can and cannot do with regards to subletting and/or leaving before your contract end. As you signed the agreement, you are bound by it.
ContractsAndAgreements - 7-Nov-17 @ 11:45 AM
I live in university accommodation (a room in a shared flat) due to a short-term switch in universities I agreed to a contract for a certain amount of weeks (45). But now I need to leave a few weeks earlier than expected. Can I get out of the contract if I hand in my notice 4 months before I need to leave and if not can I sublease my room?
Peng - 6-Nov-17 @ 3:23 PM
Bec - Your Question:
I have worked as a cleaner for 6 yrs on a wkend 6hrs total and I work the bar every weds eve 4.5hrs (same place) I dnt hav a written contact only a verbal. Can they just get rid of me for no reason? I need help and advice of what to do as I hav heard on grapevine this is going to happen.

Our Response:
Much depends upon whether you are employed or self-employed. If you are employed and working PAYE and your employer is paying tax and NI through HMRC, then you do have rights. Even if you only have a verbal contract, by the very nature of you being employed to do the work it means a contract is in place. You can see more via gov.uk link here . If you are still unsure regarding your rights, you can give ACAS a call who will advise you further. If you are being made redundant please see the link here which will explain your rights.
ContractsAndAgreements - 6-Nov-17 @ 9:37 AM
I have worked as a cleaner for 6 yrs on a wkend 6hrs total and i work the bar every weds eve 4.5hrs (same place) i dnt hav a written contact only a verbal. Can they just get rid of me for no reason? I need help and advice of what to do as i hav heard on grapevine this is going to happen.
Bec - 5-Nov-17 @ 12:02 AM
I signed a legally binding employment contract. I never looked at the conditions as it was an amended and new contract when I changed my work hours. When I wanted to hand in my notice I looked at the contract properly to see how much notice I would need to give. On further inspection of the contract I noticed that my salary had increased in my favour. Will this salary be upheld. Thanks
Shaz - 16-Oct-17 @ 6:54 PM
Hi my husband advised a family friend to purchase a machine that my husbands company may want to lease that could create a extra source of income for both my husband and family friend.My husband explained to friend he could not go into partnership because of conflict of interest but maybe they could write up a contract between me (wife) and there company so that we could benefit in that way if it went ahead.They purchased machine through their company but never got around to writing up a contract between them and myself, but both parties being my husband and friend had discussed a partnership via email is that a binding contract?We started making payments towards machine then my husbands company decided on a different avenue and now they are left with the machine and are suing my partner for half the cost of machine we have not received any financial gain from machine so are we obligated to pay or is there away of getting out of this? Any assistance would be appreciated.
Rick - 28-Sep-17 @ 3:14 PM
Rasher - Your Question:
I entered in an agreement to rent a Merchant Card machine. The representive was aware at the time of sale my shop lease was due for renewal at the end of the year so the agreement would only be for a year. The Card machine company confirmed they did agreements for 1year/2years etc. The representive led me to belive I was signing a one year contract. when I came to cancel I was informed , it was a four year contract. I am now being taken to court Any advice please.

Our Response:
You would have to read the terms and conditions of the said contract. You would have to have a written confirmation the contract was for one year, if it differs from the terms and conditions contained within.
ContractsAndAgreements - 18-Sep-17 @ 1:52 PM
I entered in an agreement to rent a Merchant Card machine.The representive was aware at the time of sale myshop lease was due for renewal at the end of the year so the agreement would only be for a year.The Card machine company confirmed they did agreements for 1year/2years etc.The representive led me to belive I was signing a one year contract. when I came to cancel I was informed , it wasa four year contract. I am now being taken to court Any advice please.
Rasher - 15-Sep-17 @ 8:48 PM
annoyed - Your Question:
My ex-partner recently contacted me by email offering a lump sum in full and final settlement of maintenance for our son. I accepted this and requested he pay within 7 days. He told me that he would have the necessary documents drawn up by his solicitor and they would pay the lump sum on receipt of the papers signed by me. I agreed. He is now saying he can't pay it because his solicitor has told him that he can only pay a lump sum once a year and a signed document by me would not stand up in court and I could request further money in a year's time. I told him that I would sign a document stating that I would not ask for more money but he is now refusing to pay the lump sum. Is the offer by him and acceptance by me via email legal binding?

Our Response:
No, this is not legally binding as his solicitor is correct. Your ex may have agreed to pay you a lump sum in principle, but this does not stop you from applying for child maintenance in the future. You may feel positive towards the agreement now, but say for instance your circumstances change and you lose your job, or you become less well off for some reason. Or the cost of living goes up and a decade down the line you feel you have been short-changed, it means you would be able to claim from CMS and this would override any previous solicitor's agreement made. So, your ex just actually being sensible here and adhering to the advice of his solicitor. A solicitor's agreement would not stand up in court, so despite your promises, circumstances can and do change and your ex is obviously erring on the side of caution that he could end up paying twice. I'm afraid, no solicitor would ever encourage him to pay a lump sum now in order to offset future child maintenance. It sounds as though this seemed like a good idea drawn up in principle and without too much forethought, but a practical one that should be avoided.
ContractsAndAgreements - 7-Sep-17 @ 11:46 AM
My ex-partner recently contacted me by email offering a lump sum in full and final settlement of maintenance for our son.I accepted this and requested he pay within 7 days.He told me that he would have the necessary documents drawn up by his solicitor and they would pay the lump sum on receipt of the papers signed by me. I agreed.He is now saying he can't pay it because his solicitor has told him that he can only pay a lump sum once a year and a signed document by me would not stand up in court and I could request further money in a year's time.I told him that I would sign a document stating that I would not ask for more money but he is now refusing to pay the lump sum. Is the offer by him and acceptance by me via email legal binding?
annoyed - 6-Sep-17 @ 6:35 PM
I received a letter containing details of a pension payout with the following wording “I’ve arranged for your Pension Commencement Lump Sum (PCLS) of £15,463.14 to be credited to your bank account.The payment should reach your account within 5 working days. Your first pension payment will be paid to your bank account on 7 September 2017 and will include the arrears due from your retirement date.”My retirement date was September 2013.The pension company are now claiming that they used September 2017 as my retirement date and that the PCLS was calculated up to that date and that no arrears are due.I would contest that apart from them making an offer and me accepting it they have used the same lump sum in both calculations which cannot be correct.Can you please advise?
Stewart - 5-Sep-17 @ 11:34 AM
Following our DIY divorce in 1996 my ex husband and I drew up an agreement which we both signed and had witnessed. One clause stated that I would be entitled to a 1/6 of his pension to cover the shortfall in my pension caused by a 12 year career gap to have children. We didn't get a consent order at the time and since then I remarried and got divorced again so I know this bars me from claiming anything from my first husband under matrimonial law but I wondered if the agreement could be considered a legally binding contract and whether failure to fulfil that clause would be a breach of contract. My ex did start paying me a nominal amount but has now decided to stop and I want to know if it is possible to condsider this a breach of contract and seek recompense in a court of law.
Susanne - 8-Aug-17 @ 8:36 AM
Fred - Your Question:
I have signed a letter of acceptance from an insurance company for the payout after a fire, they now tell me they made an error and wont pay out, is the legal? What do I do? Thankyou

Our Response:
It's difficult to know as much depends upon what they are stating the 'error' is. Insurance firms will refuse to pay out of there has been a mistake on the form, or if circumstances haven't been updated, or the person claiming has mislead the insurance company. They will always try to find a way not to pay if and where they possibly can. Therefore, you may wish to seek independent advice.
ContractsAndAgreements - 7-Aug-17 @ 2:02 PM
I have signed a letter of acceptance from an insurance company for the payout after a fire, they now tell me they made an error and wont pay out, is the legal? What do I do? Thankyou
Fred - 5-Aug-17 @ 1:12 PM
If a car dealer emails a bill of sale contract that I did not have a chance to sign but sent in a picture of a certified check with that businesses name on it is that legally binding in any way shape or form
Mitch - 4-Aug-17 @ 2:43 AM
I met a guy and he took me out 4 times. We got on quite well. It turned out he was looking for a ghostwriter to write his book.As I'm a good writer and needed the money I offered to write the book for a third of the normal fee for this type of project-also based on the fact he'd bought me a bed a short while after we met because I'd been complaining about back pains which I thought was amazingly kind. He tried to pursuade me to write for free but I refused as I knew the huge amount of work that lay ahead and I wanted to secure everything should be done as professional as possible. I carefully created a contract and we discussed a little back and forthabout the terms. I accepted to correct one part in order to make the conditions equal to both parties in case of abandonment. He was happy with the final contract and we both signed it. I had created a work plan as well and set out dates to conduct interviews as basis for the content. Following the interview sessions I was meant to carry on with the project by myself-which I did. I made sure to keep him informed weekly about my progress and send him my written work of minimum 3500 words per week. He became unpleasant as he realised I wasn't intending on inviting him to my home again following the interviews and tried to suggest I wouldn'tget any payment unless he approved of all content even when he admitted not to have read all of it but merely random parts. I asked in writing and verbally if he was sure he wanted to continue the project as he'd asked me for a meeting. This meeting took place after my second monthly fee was already due and he hadn't paid. He paid the first monthly fee two weeks later than the due date which I accepted. When my second monthly fee was due he informed me he didn't have any money for mebecause other business deals hadn't given the expected return. I let him know this was unacceptable and that if he wasn't willing to offer me a date for the payment I would regard it as abandonment from the project and the contract. I offered him a chance to pay the following Monday by 5pm and let him know I would regard it abandonment if he still refused to pay and that I intended to get legal assistance.He then send abusive threatening whatsapp medsages in response and claimed he would say I had forged his signature on the contract and that I had conned him for the bed ,the 200£ he'd given me for a dress as well as the first monthly fee of 1650£-which was paid into my bank account. I did not respond. What are my best options in this case?Kind regards Gee
Gee - 24-Jul-17 @ 1:53 AM
Following our DIY divorce in 1996 my ex husband and I drew up an agreement which we both signed and had witnessed. One clause stated that I would be entitled to a 1/6 of his pension to cover the shortfall in my pension caused by a 12 year career gap to have children. We didn't get a consent order at the time and since then I remarried and got divorced again so I know this bars me from claiming anything from my first husband under matrimonial law but I wondered if the agreement could be considered a legally binding contract and whether failure to fulfil that clause would be a breach of contract. My ex did start paying me a nominal amount but has now decided to stop and I want to know if it is possible to condsider this a breach of contract and seek recompense in a court of law.
Susanne - 22-Jul-17 @ 12:39 PM
Izzy - Your Question:
Before entering tenancy with a friend, I want to write up a separate contract stating that they cannot invite a certain person on to the property under any circumstances. Said person has been harassing and the police are aware. If I myself write up the contract stating that said person cannot enter any property I am a tenant of too, is this legally binding? If there is a breach in the contract, would that hold up in court? Any advice would be very appriciated.

Our Response:
In reality the contact has no legal basis at all, as there is little recourse if your friend decides to breach the contract. If your friend breaches it and you apply to court, the contract would not be enforceable. Plus, it would take time to get to court and cost.
ContractsAndAgreements - 21-Jul-17 @ 12:54 PM
Before entering tenancy with a friend, I want to write up a separate contract stating that they cannot invite a certain person on to the property under any circumstances. Said person has been harassing and the police are aware. If I myself write up the contract stating that said person cannot enter any property I am a tenant of too, is this legally binding? If there is a breach in the contract, would that hold up in court? Any advice would be very appriciated.
Izzy - 21-Jul-17 @ 12:14 AM
Tasha - Your Question:
I have emails to both myself and a mortgage company staying my ed husband does not want to fight over the house or want anything from the house. He has now gone back on this 2 years later and is trying to get 50% will the emails hold up in court?

Our Response:
Much depends upon the reasons why he has gone back on his word and whether those reasons are seen to be justifiable.
ContractsAndAgreements - 10-Jul-17 @ 3:31 PM
I have emails to both myself and a mortgage company staying my ed husband does not want to fight over the house or want anything from the house. He has now gone back on this 2 years later and is trying to get 50% will the emails hold up in court?
Tasha - 7-Jul-17 @ 5:26 PM
Hi.. I had a contract with a cleaningcompany which I assumed to be a 12 month one which had expired... I was wrong and it's running... I terminated dealings with the company for several reasons and asked them to leave at the end of the month...they told me I had to pay 2 months severance which I understand having now read the contractbut immediately asked that they then work the 2 months notice period and they refused... I just want to check this is 100% ok... thank you
Cyprus - 26-Jun-17 @ 7:24 PM
MeJulie57 - Your Question:
I'm in a situation where I want to let a room in a house where one person has taken out a contract for the entire 3 bed property through the letting agent. The deposit she paid is in a deposit protection scheme, and I too will pay a deposit for the room (one months rent), however it is preferred that my name is not officially put on the contract with the letting agent. If I form a new and secondary contract that sets out my agreement with the person on the original contract, specifying the terms of my deposit along with my position in the property and we both sign it, does this form a binding enough contract that my position in the property is legally safe and I could persue my deposit if I needed to?

Our Response:
You should be able to find out all you need to know via the CAB link here.
ContractsAndAgreements - 16-Jun-17 @ 12:38 PM
I'm in a situation where I want to let a room in a house where one person has taken out a contract for the entire 3 bed property through the letting agent. The deposit she paid is in a deposit protection scheme, and I too will pay a deposit for the room (one months rent), however it is preferred that my name is not officially put on the contract with the letting agent. If I form a new and secondary contract that sets out my agreement with the person on the original contract, specifying the terms of my deposit along with my position in the property and we both sign it, does this form a binding enough contract that my position in the property is legally safe and I could persue my deposit if I needed to?
MeJulie57 - 9-Jun-17 @ 8:41 PM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the ContractsAndAgreements website. Please read our Disclaimer.