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  • Writer's pictureArida Lawyers

How do I know if a contract is binding?

Updated: Nov 21, 2021

There are many different types of contracts that you may come across throughout different stages of your life. These may be named as a contract, or they could be an agreement, or have a different name all together.

The signing and acceptance of a contract can be a very exciting time, as it often means you are purchasing or committing to something new. However, it’s vital that you understand the terms of your contract and whether it is legally binding to ensure your best interests are being considered.

Some of the most common and likely contracts you may need to review and sign at some point in your life include: general employment contracts, property leases, buy and sell agreements, nondisclosure agreements, and loan agreements. If you own a business, there could be a range of other contracts that form part of your operations.

Whenever you think you are dealing with a contract, it is important that you take measures to ascertain whether it is a legally binding agreement. Some of the most typical signs that you are handling a legally binding contract include:

  • There is a specific offer presented within the contract.

  • There is a request for acceptance to the terms of the offer.

  • There is consideration or mutual agreements/promises to do something or not do something.

Every contract is different

It’s important to note that every contract is unique, and it can often be difficult to determine whether you are dealing with a legally binding contract. Not all contracts are formal, professional documentation that is easy to understand (and even if they are formal and professional, they can still be confusing to interpret).

Most law firms will agree that there are five different types of contracts. These include:

  • Written contracts

  • Verbal contracts

  • Part verbal and part written contracts

  • Standard form contracts

  • Period contracts.

Whenever you receive a contract, whether you receive it on behalf of your business or as an individual, it is essential that you take the necessary time to review the contract and understand the terms and conditions within it. If it is legally binding, you may be held to these terms.

Seeking professional legal advice on your contract

At Arida Lawyers, we offer a range of legal services to support businesses and individuals in our community. As a boutique law firm located in Parramatta, specialising in Commercial Law and Litigation, our team has been fortunate to represent multi-national corporations, medium and small size businesses, and individuals.

Our primary focus is results, but we also prioritise client-centricity, efficiency, and clear communication. We pride ourselves on making every client’s legal experience as seamless as possible by tailoring our legal strategy to the client’s unique needs. Arida Lawyers are specialists in:

  • Consumer law

  • Warranty law

  • Contract law

  • Debt recovery

  • Employment law

  • Building and construction law

  • And more.

While you’re visiting our website, you can also browse some of our free resources and blogs available online. Some of our most recent articles include: What happens after the Court has awarded Judgment/Default Judgment? Do consumer guarantees extend to businesses? The outcome of my warranty claim is unfair. What are my options?

If you would like a free cost assessment from Arida Lawyers, you can contact our friendly team today on 1300 146 390 or

This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.

Liability limited by a scheme approved under Professional Standards Legislation.

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