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Contracts
A contract is a legally binding agreement between two or more people or businesses.
When you agree to buy something now and pay for it later or take out a loan, you enter into a contract. It is between you and the person or organisation that you bought or borrowed from.
For many contracts it does not matter if you made the agreement in writing or just spoke about it. See 'Contracts – frequently asked questions' (link below).
Not all agreements form legally binding contracts. A valid contract needs the following elements:
- People entering the contract must intend the contract to be binding.
- An offer is made by one person and is freely accepted by another.
- Some price (money, right or benefit) is paid in return for a promise.
- People making the contract have legal capacity to contract.
Contracts won’t be enforceable if they:
- are agreements to do illegal things
- breach other legal requirements
- are made between family members and were never intended to be enforced, for example, an agreement between parents and a child for pocket money.
See ‘Contracts – frequently asked questions’ (link below).
More information
Contracts – frequently asked questions
Related publications
Debt problems: the law, your options
How we can help
Victoria Legal Aid doesn’t give legal advice about contracts, but our free Legal Information Service may be able to give you some information over the phone. We may also be able to refer you to another organisation that can help you. You can speak to a legal information officer in English or ask for an interpreter.
Phone (03) 9269 0120 or 1800 677 402 (country callers), Monday to Friday from 8.45 am to 5.15 pm.
To find out more about any of our legal services see What we do.
Who else can help?
See Getting help with financial problems for details of free financial counselling services in your area and other organisations that can help you.