What is a “contract”?

A “contract” is any legally enforceable agreement – an exchange of promises for which the law can provide a remedy if the promises are not kept.  It may be an agreement to pay something, to do something, to not do something, to give or receive something, or to warrant something.

A contract may be written down, or it may be verbally agreed; it may be a formal set of terms that is negotiated over many months, or it may be a simple promise agreed to via an email or even a handshake. 

As a general guide, an agreement, promise or undertaking will be a legally enforceable “contract” whenever:

• Both sides intend to enter a legal relationship and be legally bound by their promise.
• Both sides are contributing something of value to the deal – which doesn’t have to be money and could be a service, a thing, or an “in kind” contribution.
• There is a “meeting of the minds” (or consensus) about the terms of the deal.

When two parties agree something in a commercial or business setting, it will generally be presumed that they intended to be legally bound by it – and this is likely to be the case whenever agreements are reached on behalf of the University.  It is particularly important to be aware of the manner in which even seemingly informal “understandings” can have the potential to bind the University in the future as legally enforceable “contracts”.  It is also important to understand that it is the content of an agreement, rather than the title, that will determine its contractual status, ie even if an agreement is titled "Memorandum of Understanding", "MOU" or "Statement of Intent", it could still be held to be a binding contract.