Victoria FergusonThe tip for today is: Be careful of informal contracting
🚨 Contracts do not need to be in writing to be legally binding. They can be formed by telephone calls, exchanges of emails and even by WhatsApp exchanges.
🚨 A formal written contract is recommended for businesses since it creates a record of what has been agreed, it confirms the parties’ rights and obligations, and the parties can include provisions which protect their position.
🚨Individuals dealing with contracts on a day in day out basis, need to be aware that it is best to avoid ‘informal’ communications, such as emojis and other text abbreviations, when discussing contract terms. There is a risk that the courts look at the course of dealings and use it to say that a contract has been formed. This is unsatisfactory for businesses since they have missed the opportunity to include robust terms and conditions. It may mean that the business is bound to a contract it did not intend to sign up to.
🚨The recent Jaevee Homes v Fincham case demonstrates that you need to make it clear in contract discussions if a formal contract is a prerequisite to being legally bound.