Binding Contracts

Did you know that using emojis might be interpreted as accepting the terms of a contract? 

In a recent Canadian case, the court has acknowledged the ‘thumbs-up’ emoji as a valid signature. This decision was reached based on other prior communications and conduct between the parties, however, this decision could be adopted in the right circumstances in Australia too. 

When does a contract become binding?

There are four essential elements in contract law to create a binding contract. They are as follows: 

1. There must be an existing offer being made by one party to the other
2. The other party must have accepted the offer 
3. Intention for a legal relationship
   • The law will consider what a reasonable person would consider the parties intended in the circumstances which the agreement will reach. It does not consider what each party individually believed.
   • Commercial arrangements are presumed to be intended to be legally binding.
4. Consideration
   • This is the price that is paid for a promise made by one party to another. Note that love and affection are not ‘consideration’.

With all four elements satisfied, you are likely to have a binding contract. 

Other things to consider

• Contracts do not have to be in writing to be legally binding 
• The court will not enforce all contracts – if they involve illegal conduct or are prohibited by legislation, the contract may be void.

Disclaimer: This publication provides general information of an introductory nature and is not intended and should not be relied upon as a substitute for legal or other professional advice. While every care has been taken in the production of this publication, no legal responsibility or liability is accepted, warranted, or implied by the authors or our firm, and any liability is hereby expressly disclaimed.

Get in touch to obtain legal advice with experts our in this field offering professional services in resolving complex contract matters.