Legal Beagle: Contracts

I've been so busy posting interviews and reviews I've been neglecting the Beagle! Here is the column I did for the Romance Writers of Australia Hearts Talk newsletter for December . Hearts Talk is packed each month with writing craft tips, author interviews, new release information, brilliant on-line courses (known as OWLS) and many other things. RWA is a fabulous organisation (for romance and non romance writers) - and its magazine (free to all members) is a valuable resource as well!

This month's column is on the topic of contracts (or binding agreements). I know this sounds dry but … contracts are something that come up often in novels. I hope an introduction into what makes a valid contract might prove useful to writers out there!

Legal Beagle: Contracts

Agreements have to comply with the law in order to be binding and enforceable—we saw this in relation to surrogacy arrangements in last month’s column. This column will look at some everyday contractual scenarios that you may come across in your writing.

1. Simon threatens Susie (or someone close to her) with physical or economic harm if she refuses to sell her farm. Any agreement (even if Simon paid a fair price and Susie signed documentation) would be invalid for duress. Consent is an essential ingredient in every contract and Susie did not freely consent to the contract.

2.  Edward promises that if his daughter Emily does well at school, he’ll buy her a car. Emily gets straight A’s but Edward refuses to buy the car. There would be no contract because every contract needs an intention to be ‘legally bound.’ The law presumes that when close family members, or people in a close social setting, enter into an agreement, they don’t intend to contract (the opposite presumption applies in a commercial context).

3.  Jenny and Jay are workmates. Jenny is moving overseas and promises to give Jay her old car. Then she changes her mind. There is no contract because every contract needs ‘consideration’ or some form of payment, and both parties have to provide it. Without payment there is simply a gift (so there’s a chance it will have to be returned if there’s a change of mind). Jay could have given Jenny a dollar when she made her promise—then she would have been bound.

4.  Marjorie, a cat lover, consumes a bottle of wine. Soon afterwards she enters into a contract to buy a $2 000 beagle. Marjorie would be bound by the contract whether she wants the dog or not—provided the dog seller didn’t know she was so affected by alcohol she didn’t know what she was doing.  

5.  James enters into an agreement with Mary, an elderly and unwell neighbour, to buy her land. If James has taken advantage of Mary in some way (for example, he failed to explain the agreement, and didn’t encourage her to get independent advice) the agreement would fail because of inequality in bargaining power—James’s behaviour was unconscionable or unfair. Undue influence could also apply.

6.  Lane offers to pay Adam to teach her about sex. This situation came up in Avril Tremayne’s The Contract (I love this book!) Avril made it plain that Lane and Adam knew their agreement wasn’t binding (even though it was in writing and signed) but merely a series of guidelines. Why couldn’t there be a legally enforceable contract? There would be problems with uncertainty, subject matter, and a lack of intention to be legally bound. And assessment of damages might be tricky too. How do you quantify mediocre sex—not that this was a problem with Lane and Adam …

Statute law applies to many contractual issues—particularly consumer law. Have a look at the NSW Fair Trading site (each State and Territory has something similar). For information on consumer contracts go to the contracts tab (via the consumers tab). Hopefully all your Christmas gifts matched their description, were fit for purpose, and of merchantable quality. If not … consumer law will help!