Formalities
When a contract must be in writing, what a sufficient note or memorandum looks like, part performance, deeds, and the regulatory formalities that matter more in practice.
Learning outcomes
- Identify contracts required to be evidenced in writing.
- Explain the effect of non-compliance and how it may be cured.
- Apply part performance and estoppel where writing is absent.
Most contracts require no particular form. Australian law generally enforces oral agreements as readily as written ones, and the presence of a signed document goes to proof rather than validity.
Three situations displace that general position.
Writing required by statute
Certain contracts must be evidenced in writing and signed by the party to be charged. The most important is a contract for the sale or other disposition of land or an interest in land, a requirement descending from the Statute of Frauds and now found in each State and Territory's property or conveyancing legislation. Guarantees are commonly subject to a similar requirement.
The consequence is usually that the contract is unenforceable rather than void — an important distinction, because an unenforceable contract may still have legal effects, and the defect can often be cured.
The writing need not be a formal contract. A note or memorandum recording the essential terms and signed by the party to be charged is generally enough, and it may be assembled from several documents where they refer to one another.
Part performance
Equity will not permit a statute designed to prevent fraud to be used to commit one. Where a party has performed acts unequivocally referable to the alleged contract — most clearly, taking possession of land and improving it — a court may enforce the agreement despite the absence of writing.1 Equitable estoppel now covers much of this territory and is often the stronger argument.
Deeds
A deed binds without consideration, and is required or conventional for some transactions. Execution requirements are set by statute in each jurisdiction and have been modernised to accommodate electronic execution — check the current provisions rather than the historic formula.
Consumer and industry-specific requirements
A great deal of modern formality comes from regulatory statutes rather than the general law: cooling-off periods, mandatory disclosure, prescribed terms and required warnings in areas such as consumer credit, residential building work, door-to-door sales and residential tenancies. Non-compliance may make a contract unenforceable, expose a party to penalty, or give the consumer a right to terminate — the consequence depends on the particular Act.
Applying this in a problem question
- Ask first whether any formality is required at all — usually none is.
- If land or a guarantee is involved, identify the jurisdiction's statutory provision.
- Look for a note or memorandum, including documents read together.
- If writing is absent, consider part performance and estoppel.
- Check for regulatory formalities specific to the subject matter.
Where the authority sits
Principally statute, and it differs by jurisdiction. State the Act and jurisdiction; a general reference to "the Statute of Frauds" is not an Australian citation.