Law Contract

www.fenwickelliott.co.uk

Ted Lowery

Do I have a Contract?

Part I: Introduction

1.

Any one with experience of building will recognise that the contract is of

fundamental importance. A building contract should define the

relationship between the parties so that each knows what is going to be

built, how long it should take and how much it is going to cost.

2.

The general requirement for a contract is that at some point, the parties

who want to enter into a contract reach agreement on the terms of that

contract.

The essence of a building contract, like any other contract, is agreement.1

3.

To use one of those helpful Latin phrases that we are now discouraged

from using, there has to be a point at which the parties are ad idem, i.e.

of the same mind, as regards the terms of the contract they wish to agree

and, generally speaking, the contract will be formed when the parties

reach that point.2

4.

Part II of this paper describes the fundamental requirements of a building

contract. Part III goes on to consider the position in which it may not be

clear whether all terms have been agreed or whether a contract has been

formed. Part IV deals briefly with the issue of contract formation in

relation to letters of intent.

Part II: Contract formation - the fundamentals

5.

Building contracts do not enjoy any special status. The fundamental

requirements for contract formation established by common law equally

apply to building contract formation. In summary, a contract will have

been formed if the following criteria are satisfied:

•

•

the contracting parties had an intention to enter into a contract;

•

the contract is supported by consideration;

•

(in certain limited circumstances) the contract is in writing;

•

the contract is not for an illegal purpose;

•

6.

the contracting parties have legal capacity to enter into a contract;

there has been offer and acceptance.

I deal with these in turn....