Contracts/Advice

Entering in a Contract

A contract can be an agreement between two parties where one party agrees to do or provide something and the other party agrees to provide the consideration or payment (mostly in the form of money) in return for that. People enter into contracts all the time even though they do not necessarily recognise this.

For example, when shopping, the shopkeeper agrees to sell you the goods and you agree to pay for the goods, a contract is formed. The contract is performed when the shopkeeper hands you the goods and you pay for the goods in return. As soon as it is done, the contract has been completed. You have not entered into a formal written agreement but the evidence of the contract being entered into and performed would be the goods in your possession together with an invoice or receipt issued by the shopkeeper.

Other examples of contracts in everyday life are:

use of public transport, upon payment of fares, you are given the service of transportation to the intended destination. The ticket issued to you is evidence of a contract. Similarly, the airline ticket is evidence of a contract.
engaging a serviceman such as a plumber, electrician or handyman to do some work. Upon completing the work, you pay the serviceman. A contract is entered into when you engage the serviceman and you agree to pay for the service. The contract is completed when the job is done and payment is made.
at work, whether you are permanent, part-time or casual employee or whether you are an independent contractor, you agree to provide your labour in return for payment of your remuneration.

Most people believe that a contract is entered into when they sign on a dotted line on a piece of paper stating their names. Examples of these types of documents signed by people during their lifetime are:

residential tenancy agreements or leases
contract for purchase of land/property
building contract for construction of a house
contract for purchase of motor vehicle
loan documents with lenders

Essential ingredients of a contract are: there is offer and acceptance, there is performance of the contract and there is a consideration paid for the performance of the contract. Whilst people do not need to see their lawyer on simple matters, it is important to consult your lawyer when the agreement or transaction is complicated or involves considerable sums of money.

Problems

So long as the contract is performed to both party's satisfaction, there is generally never any problem. However problem arises when one party is dissatisfied with the other or when there is a breach of the contract. Dissatisfaction can arise when one party did not do or provide something as agreed or the other party did not pay for the goods or service as agreed.

Some examples of these types of events are:

the car you purchased turned out to be a lemon
the builder did not complete the house as you had agreed
the serviceman did not do the job properly and you need to or had to engage another serviceman
you are not happy with the service or goods or products you obtained

Whilst the government has passed laws and set up various bodies to assist people to deal with some of these types of problems, on other occasions you will need to go to the Court to have the matter resolved.

Apart from preparing a contract on your behalf, a lawyer can advise you on other contracts, particularly when there is a problem. Some of the things the lawyer will advise you on are:

whether or not there is a contract in existence when there is no formal agreement or unexecuted documents
whether a contract was properly entered into or not
having signed a contract, whether you can get out of the contract or whether you can enforce the contract
what compensation you may have to pay or you may achieve if there is a breach of the contract.

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