Tuvalu Island Courts Bench Book - Federal Court of Australia

6 Contracts
6.1 What is a Contract?
A contract can be defined as:
• a legally enforceable agreement between two parties; or
• a set of promises that the law will enforce.
Contracts can be made either orally or in writing.
One of the most common contract claims coming within your jurisdiction will be non-payment
of debts.
6.2 The Elements of a Contract
It is the Court’s job to determine the circumstances in which a promise shall be legally binding
on the person or persons making it.
In order to determine whether the promise or agreement is a contract, the law requires that three
main elements exist:
1. Agreement;
2. Consideration;
3. Intention to create legal relations; and
4. Capacity.
Once you have determined that all of these elements exist, you have the existence of a contract.
6.3 Agreement
Whether or not there is agreement is determined by the legal rules of offer and acceptance, and
certainty. These rules answer four main questions:
• Has agreement been reached?
• When was agreement reached?
• Where was agreement reached?
• What was the express content of the Contract
Tuvalu Island Courts Bench Book June 2004