A contract can take different forms, some are verbal, some written, some are formal and some informal. Irrespective of the format a contract essentially comprises of some common elements:
- you make someone an offer
- they accept it
- and you promise to give something or do something in return for what you’re getting. The legal term for this promise is “consideration”.
You should never sign a contract unless you are sure you understand the contents of the document and are very clear about the intentions as outlined in the document. In general terms once you have signed the document / contract, you won’t be able to get out of it later.
And if there are any terms within the document that you don’t understand, get legal advice.
Generally, contracts don’t have to be in writing. A verbal agreement is binding but if things go wrong, how do you prove the terms of a verbal contract?
Putting the contract in writing also makes sure you both understand exactly what’s being promised before you agree. Remember that when you enter into a contract, you are bound by everything you have specifically agreed with the other person or company / organization. You may also be bound by terms and conditions that were not specifically mentioned but are assumed under the law to be part of the contract (example the Consumer Guarantees Act)
“It is advisable to get legal advice before entering into a contract to buy or sell real estate (Agreement for Sale and Purchase of Real Estate).
To contact an Auckland lawyer at Quay Law Barrister and Solictor ph (09) 523 2408.