Contracts, or agreements, may be verbal, or in writing, and written contracts may be made by deed, that is to say, by a document, not only signed, but also sealed and delivered. The seal may be made with sealing wax, or may be merely a paper wafer, affixed to the document, opposite to the signature of the person making the deed.
The consideration must be stated in the contract, except in the case of a guarantee. In the event of an action being taken on a contract, the Court does not inquire into the adequacy of the consideration, unless fraud is alleged by one party to the transaction.
Contract by Post.
A contract, or agreement, may be made by correspondence, provided that the letters definitely show all the terms agreed.
Delivery of a deed may be actual, but is generally effected by the person signing, placing one finger on the seal, and saying, ‘I deliver this as my act and deed.’ A deed is binding, as, for example, a deed of gift, although there is no consideration passing ; but any contract which is verbal, or written without a seal, must have a consideration to support it. Thus, a promise to give, even though in writing, and signed by the person making the promise, will not be legally binding on him. It cannot be enforced by the person to whom the promise is made. An agreement for an exchange of one article for another would, however, be binding on both parties.
Many contracts must be made in writing, and signed by the person to be bound thereby. Others must be made by deed, as, for example, a lease for a longer term than three years.
A verbal agreement is enforceable if there has been a part performance. For instance, a verbal agreement for the sale and purchase of a house at a fixed price may be enforced by either party, if the purchaser has entered into possession of the house. But the payment of a deposit, or part of the purchase-money, does not, of itself, constitute a part performance. An auctioneer, at the time of an auction, is considered to be the agent of the purchaser, as well as of the vendor, so that both of them are bound by a memorandum of the sale made by the auctioneer, and signed by him.
Generally, agreements require a sixpenny stamp, which may be adhesive (to be cancelled on signing), or, within fourteen days after being signed, they may be impressed at Somerset House, on attendance there, or by leaving the document at one of the chief post offices in the provinces for that purpose. Some agreements are exempt from any stamp duty, as, for instance, an agreement for the employment of a workman or menial servant, an agreement of which the subject matter is under five pounds, or an agreement relating to the sale of goods. But a hiring, or house-purchase agreement requires a sixpenny stamp, and such an agreement under seal a ten shilling stamp.
The following contracts or agreements, among others, must be in writing, namely : (I) Bills of Exchange, Promissory Notes, and Acceptances of Bills of Exchange. (ii) Contracts of Marine
Insurance. (iii) Assignments of Copyright. (iv) Acknowledgments of debts which have become barred by lapse of time (I.e., generally six years). The following contracts or agreements, or some memorandum or note thereof, must be in writing, signed by the person to be bound thereby, or his duly authorised agent, namely : (a) A promise by an executor, or administrator, to be responsible for damages out of his own property. (b) A promise to be responsible for the debt, default, or wrongful act of another (I.e., guaranteeship by one person for another, or a suretyship). (e) An agreement made in consideration of marriage (I.e., such as an agreement for a marriage settlement—not a promise to marry). (d) A contract for sale of, or letting, land, houses and buildings, or any interest in or concerning them. This includes an agreement for the sale of a growing crop, as of grass, to be cut and removed by the purchaser. (e) Agreements not to be completed or performed within one year from the making thereof, as, for instance, a contract for service for a year beginning next Monday week. (/) A contract for sale of goods to the value of ten pounds or more, unless the buyer shall accept and receives part of the goods, or pays a part of the price.