Can I Enforce an Unsigned Contract in the UK?

Many business owners mistakenly believe that if they do not sign a contract, they will not have not agreed to anything. This can be partially correct, as a signature acts as the final stamp of approval and evidences an intent to be bound by a contract. However, in contract law, business owners can also be legally bound to a contract even if they have not yet signed that document. This article will outline when and how an unsigned contract can be enforceable. 

Conditions of a Legally Binding Contract

There are five steps to building and creating a legally binding contract. You and the other party you wish to conduct business with must have:

1. made or received an offer to do business;
2. had that offer accepted;
3. provided with consideration, also known as payment, for the arrangement.
4. the intention to provide payment if this is a long term arrangement;
5. ensured the terms of the contract are clear and certain; and 
6. an intention to create legal relationships. 

You can show you had an intention to create business relationships by agreeing on a terms sheet that sets out the terms and conditions of an agreement. Alternatively, you can show this intention by arranging for payment of services. Another way to enforce a contract is to have both parties sign it. This proves that the contract is legally binding and that you and the other parties have accepted the terms and the obligations conveyed by the document. But, you do not need to always sign contracts for them to be legally enforceable. Indeed, you can accept them by conduct or even verbally. 

Acceptance by Conduct

Acceptance by conduct is where one party starts performing the duties provided in the contract, without signing a legal document. In doing so, they demonstrate their intention to honour the terms of the agreement. By doing so, a contract can become legally enforceable.

For example, parties can show they have provided acceptance by conduct if they:

• provide payment for a service; 
• if a party provides a service (i.e. delivers goods and requests payment). 

So, even if a contract is not signed, if the party performs the duties outlined in the contract, this demonstrates that they have accepted its terms and established a relationship. As a result, you can enforce the terms of a contract if required. 

Verbal Contracts and Unilateral Contracts

There are two other situations where you do not need a signed contract for an agreement to become legally binding.

Verbal Contracts

There is often minimal documented evidence to show that an arrangement exists with oral agreements. This means it is often difficult to enforce terms and prove what both parties agreed to. Nevertheless, the same principle of acceptance by conduct applies, even if you have not set the terms out in writing. 

Unilateral Contracts

A unilateral contract is an agreement created by an offer that parties can only accept through performing the agreed services. Logistics businesses often use unilateral contracts for the delivery of goods or vehicles. 

For example, a logistics company may offer to pay £2000 for a courier to drive a lorry from one destination to another. Bringing that lorry to the destination amounts to acceptance of that offer and creates an enforceable contract. Again, you do not require signatures for unilateral contracts to become enforceable. 

It is worth noting that some formal contracts must be made as a written document. This is similar to deeds and transfers of property. Otherwise, they will not constitute a valid contract in the eyes of the law. 

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Key Takeaways

You can enforce an unsigned contract in England and Wales, provided that you meet specific conditions. For you to have an enforceable unsigned contract, you must show that both parties agreed on the terms and intended to form a business relationship. 

A contract is legally enforceable if it:

• has been signed;
• is unsigned, but parties to the contract are performing its terms; or
• is verbal, and parties are undertaking the terms of the agreement.

You or another party might perform the tasks set out in an agreement, such as delivering a service or product. In that case, you will have accepted the terms of the contract. Consequently, the agreement is enforceable under English and Welsh law. 

If you need more advice on signing or enforcing a contract under English or Welsh law, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and help you ascertain whether you are entitled to legal recourse. Call us today on [number] or visit our membership page.

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