Are all written agreements legally binding?

It is important to know what a contract is at law. In New South Wales, as in most jurisdictions, not all written agreements are automatically legally binding.

Whether a written agreement is legally binding depends on several factors, including:

Offer and Acceptance: There must be a clear offer by one party and an unconditional acceptance of that offer by the other party. Both parties must agree to the terms of the contract voluntarily, without any undue influence or coercion.

Intention to Create Legal Relations: The parties must intend for the agreement to create legally enforceable obligations. For example, agreements between family members or friends for casual arrangements may not be intended to create legal relations and may not be enforceable.

Consideration: There must be consideration exchanged between the parties, meaning each party must give something of value in exchange for something else of value. This could be money, goods, services, or a promise to do, or not to do, something.

Capacity: Both parties must have the legal capacity to enter into a contract. This means they must be of sound mind, over the age of 18, and not under duress or undue influence.

Certainty: The terms of the agreement must be sufficiently clear and definite for a court to enforce them. Vague or ambiguous terms may render the agreement unenforceable.

Certain types of contracts must also comply with specific legal requirements to be enforceable.

If these elements are present, then the written agreement is likely to be legally binding. However, it is essential to note that the enforceability of contracts can vary depending on the specific circumstances of each case and applicable laws.

It is always a good idea to seek legal advice from an experienced contract lawyer to ensure that your agreements are legally binding and enforceable.

In addition, in case the agreement is legally binding and enforceable, it is important to obtain advice from a lawyer before you sign an agreement. It can be costly and difficult to try and vary or terminate an agreement after it has been signed. 

If you need assistance with writing, or reviewing, a contract, please reach out to our highly experienced team of contract lawyers.