The foundation of the contractual relations is the agreement of the parties. In the absence of agreement, or circumstances which the law treats as giving rise to agreement, there can be no contract. The legal requirements for formation of a contract apply to contracts of all types, including a contract to vary or renew a contract. There are three principal requirements applicable to all transactions:
(1) agreement (express or implied);
(2) consideration; and
(3) an intention to create legal relations.
Although the existence of agreement is essential, it is not of itself sufficient, for an agreement may fail to take effect as an enforceable contract because of the absence of some other essential element affecting formation.
Even where a contract (or a variation to an existing contract) has been formed by agreement, the contract may not be valid or enforceable, due to:
(1) the failure of a condition precedent to enforceability which the parties have specified in their agreement;
(2) the presence of a vitiating factor, for example, fraud;
(3) a failure to comply with a formal requirement imposed by statute;
(4) a lack of contractual capacity;
(5) the fact that the party seeking to enforce the contract is not a party to the contract;
(6) the promise or agreement being illegal under statute or contrary to public policy; or
(7) the existence of a breach of contract on the part of the plaintiff.
At Malkin Lawyers we are experienced in advising clients on a wide variety of contracts including joint ventures, land development projects, shareholder agreements, sale of business agreement, loan agreement, employment contracts and retirement village agreements.