Contracts can either be in the form of a deed (formal contracts) or not in the form of a deed (simple contracts). All contracts that are not under seal or that are not contracts of record are termed ‘simple contracts’. These contracts are often verbal or oral as opposed to anything in writing or under seal. Certain kinds of contracts are required by various statutes to be entirely in writing otherwise they will be void or unenforceable. Where contracts are of importance, it is generally considered prudent to record the agreement formally. This will set out the rights and liabilities. More importantly, the contract will provide valuable evidence in the event of a dispute. Below are examples of common contracts that need to be in writing.
Examples of Contracts Required to be in Writing
Many types of contracts are required by state legislation to be in writing, including consumer credit contracts, real estate agent contracts and building contracts. Contact a contract lawyer to determine whether your contract is required to be in writing. The list below is not exhaustive:
- Bill of exchange and promissory notes (Bills of Exchange Act 1909 (Cth));
- Cheques and payment orders (Cheques and Payment Orders Act 1986 (Cth));
- Assignments of copyright (Copyright Act 1968 (Cth));
- Contracts of marine insurance (Marine Insurance Act 1909 (Cth));
- Assignments and mortgages of life insurance policies (Life Insurance Act 1945 (Cth)); and
- An acknowledgment of a debt barred by the Statute of Limitations legislation.
A guarantee is a special promise to answer for a debt, default or miscarriage of another person and or entity. A guarantee does not need to be in writing if it is part of a larger transaction or is designed to protect the property of the guarantor.
The definition of an interest in land is wide and varies between jurisdictions in Australia. An interest in land can include freehold and leasehold interests, profits a prendre, easements and covenants that run with the land. Most agreements involving real estate are not enforceable unless they are in writing. In all states and territories, most transactions relating to land are void unless they are in writing.
Variation of Contracts Required by Writing
Where contract variations are required to be in writing, they must be in writing. These may include formal notice requirements for the variation to take effect. Notably, a contract, which is required to be in writing may be rescinded orally. However, where the agreement rescinding the contract replaces the old obligations with a set of new obligations to which a requirement of writing also applies, the new obligations must be in writing or evidenced by writing.
LegalVision can assist you with any questions you may have about contract drafting and review. LegalVision has a team of experienced contract drafting lawyers who can assist you in determining whether your contract is valid or not. Please call our office on 1300 544 755 and our Client Care team will happily provide you with an obligation-free consultation and a fixed-fee quote.