When it comes to contracts, the rules are clear: for them to be legally binding, they must be signed by both parties. However, what happens when a contract is not signed? Is it still legally binding in Australia?
The short answer is yes. While it’s always best to have a signed contract, an unsigned contract can still be enforced under certain circumstances.
First and foremost, it’s important to establish that a contract doesn’t need to be in writing to be legally binding. In fact, verbal agreements can also be enforceable under Australian law. However, it can be difficult to prove the terms of a verbal contract, which is why a written contract is always recommended.
An unsigned contract can be legally binding if both parties have clearly expressed their agreement to it. For example, if both parties have exchanged emails or letters agreeing to the terms of the contract, this can be considered a binding agreement, even if neither party has signed a formal document.
In some cases, a party may argue that they never intended to be bound by the terms of an unsigned contract. In these situations, the court will consider the circumstances surrounding the agreement to determine whether there was a mutual intention to be bound by the terms.
For instance, if the parties have already begun performing the obligations set out in the contract, this can be seen as an indication that both parties intended to be bound by the agreement, even in the absence of a signed document.
It’s worth noting that there are some types of contracts that must be in writing to be enforceable under Australian law. These include contracts for the sale or transfer of land, guarantees, and contracts lasting more than a year.
In conclusion, while a signed contract is always preferred, an unsigned contract can still be legally binding in Australia under certain circumstances. It’s important to ensure that both parties have clearly expressed their agreement to the terms of the contract and that there is a mutual intention to be bound by those terms. If in doubt, seek legal advice to ensure that your contract is watertight.