Formalities in Law

Topics: Contract, Contract law, Void Pages: 18 (5630 words) Published: April 7, 2013
Common law has no form requirements for contracts: oral contracts are enforceable Consequences of failure of complying with formal requirements vary from statute to statute but include penalties, fines and civil consequences ie. Non-enforceability of contract Legislation imposes formal requirements for certain types of contract (this goes beyond the common law) ; e.g.: Consumer credit (has to have warnings, and writing)

Sale of motor vehicle (needs written work of purchasing car before registering) Residential tenancy (lease drafted signed by vendor/real-estate agent and seller) Building contract (needs to be in writing)

Reasons for form requirements:
1. When parties have got written evidence, it makes life for courts easier in comparison to oral contracts-usually more serious= increases enforceability, provides reliable evidence that contract has been made allowing easily identifiable terms .Reduces controversy and time 2. Promotions caution, drawing attention of parties to the potentially serious consequences of the agreement 3. Protection of the vulnerable party: Forces stronger party to set out terms they wish to impose in a form that makes the terms more likely to to be understood, and harsh or important terms more likely to be noticed by the vulnerable party. 4. Channelling function: Helps to identify particular types of transactions and to mark them as enforceable or unenforceable

Most known historical source for the requirement of writing is the English STATUTE OF FRAUDS 1677, which found its way into the law of most common law jurisdictions -No action should be brought on contracts of particular types unless the agreement or some memorandum or not the agreement was in writing and signed -Designed to prevent fraudulent claims being made on the basis of false evidence (Was created at a time where a party could pay a witness to provide a false testimony of a verbal agreement between the parties in litigation)

“No action shall be brought whereby to charge any executor or administrator upon any special promise, to answer damages out of his own estate; or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriages of another person; or to charge any person upon any agreement made upon consideration of marriage; or upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them; or upon any agreement that is not to be performed within the space of one year from the making thereof , unless the agreement upon which such action shall be brought, or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.” There are 5 main types on contracts affected by Statute thus required in writing: 1. Any contract which an executor has an undertaking to settle debt of a deceased person 2. Contract of guarantee

3. Contract of marriage
4. Contract for interest of land
5. Contract that is longer than a year (long term contract) or contracts for sale of goods for price of 10 pounds or more Criticisms:
“If the statute had always been carried into execution according t the letter, it would have done ten times more mischief than it has done good, by protecting rather than preventing frauds”
Some judges take a narrow view whereas others find exceptions to the Statute Statute of Frauds has been modified or repealed and partly re-enacted in all Australian States and Territories: -Contracts in the sale of land are affected by Legislation

-Contracts and agreements in the other options are affected by the Statute in some jurisdictions Eg/ Instruments Act 1958 (Vic) s 126
“An action must not be brought to charge a person upon a special promise to answer for the debt, default or miscarriage of another person or upon a contract for the sale or other disposition of an interest in land unless the...
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