Skip Navigation

Apply Online

Compare Home Loans

Home Loans

Getting your loan approved is just as important as choosing the right loan.

Most people don't realise how difficult it can be to meet the Lender's strict criteria. Getting help from your True Choice Home Loans Mortgage Analyst / Broker is one way to avoid disappointment.

Arrange an Appointment

Contract Law

The Law of Contract

  1. The law of contract is concerned with the rights and obligations which arise when a promise is made which the law will enforce. It is the quality of enforceability which distinguishes a contract from other agreements or arrangements (eg, social undertakings).
  2. The law of contract is part of the law of obligations. Traditionally the law distinguishes between obligations which are self-imposed and those which are imposed upon a person by some external rule or rules of law. Broadly speaking, the law of contract is that part of the law which deals with obligations which are (or are presumed to have been) voluntarily assumed by the parties. Other major areas of the law of obligations are the law of torts (which broadly are concerned with civil injuries and wrongs) and the law of restitution (which broadly is concerned with the obligation to pay for benefits received where there has been no contract to pay for them).
  3. Contracts may be bilateral or unilateral. In a bilateral contract the parties exchange promises to do (or refrain from doing) something. It is the exchange of promises that binds them in law to honour their promises.
  4. The law also recognises and enforces unilateral contracts. Instead of an exchange of promises in which the parties are mutually bound only one party promises to perform; the performance is conditional upon the other doing something which, however, the latter is not bound to do (eg, reward cases). The contract is 'unilateral' or one-sided because it only binds one party.

The formation of a contract requires:

An intention to create legal relations. The parties must intend that their agreements have legal force; an intention that the agreement merely be 'morally' binding is not enough.

Formation (and the ascertainment in general of a contract) is determined by what the parties intend. You must note, however, that the law of contract in general is concerned with the interpretation which would be placed upon the words and actions of the parties by a reasonable person, rather than upon subjective intentions, i.e. intention is assessed objectively not subjectively.

Correspondence between offer and acceptance. According to traditional contract analysis, there must be a clear indication (an 'offer') by one party (the 'offeror') of a willingness to be bound on certain terms accompanied by an unqualified assent ('acceptance') to that offer which is communicated by the other party (the 'offeree') to the offeror.

Consideration. There must be consideration given by each party. Consideration may be defined as some benefit moving from the promisee to the promisor or some detriment incurred by the promisee being, in either case, the agreed price of the promisor's promise.