Formation of contract

Introduction

A contract is an agreement entered into voluntarily by two or more parties with the intention of creating a legal obligation.

Form of the contract

As a general rule a contract can be in any form. It may be written, oral, or inferred from the conduct of the parties. Some contracts must be made in a particular form such as writing; a contract for the sale of land is one such example.

Specialty contracts

Conveyances of land and leases for three years or more must be by deed - these are known as specialty contracts. Such contracts must be in writing, signed, witnessed and delivered (i.e. intended to take effect).

The limitation period for a contract made by deed is 12 years. For all other contracts, the limitation period is six years.

Elements of a valid contract

The following elements are needed to form a valid contract:

• Agreement, i.e. offer and acceptance.
• Consideration.
• Intention to create legal relations.
• Capacity and Legality

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