Bare Minimum for a Contract

There are five legal essentials for a contract in English law:

  1. Offer: a promise to do something
  2. Acceptance: a nod, handshake, email or other action which accepts that offer (it has to be a ‘yes‘ (or ‘hell, yes‘) rather than a ‘yes, but…‘)
  3. Consideration: price, exchanged services or anything of value
  4. Intention to create a contract: this is presumed in B2B
  5. Certain terms: a contract needs to be written in such a way that someone, who knows nothing about the negotiations, contract history or any promises made, can immediately and clearly understand everything that both partners have agreed to do.

From this, you should note that the first four of these are fairly easy to tick off your ‘is it a contract?’ list.

The trickiest element is certainty.

Certainty of content

The normal test for determining whether the parties have reached agreement is to ask whether an offer has been made by one party and accepted by the other. Even where an apparent agreement has been reached it may fail to give rise to a binding contract because the agreement is incomplete or insufficiently certain

Certainty means more than just clarity of expression. It requires you to ensure your agreement includes all the key terms which the courts view as essential. The bare minimum of essential terms for a construction contract are:

It is trite law [aka stating the obvious] that in order to have a building contract you usually need agreement as to parties, workscope, price and time Hart v Fidler

You can have a contract with these bare minimum terms. Even if some important terms are missing, if the court does not consider those terms essential, then you will still have a contract. However, a contract with just these 4 contents will be a little sparse even for me. For construction contracts, I have listed my 10 essentials. In my book on letters of intent, the chapters following the same 10 essentials. Despite sticking to 500 words, in my book on consultant appointments, the chapters list 13 essentials (partly as it covers B2C contracts as well as construction contracts).

The parties can also make any terms essential – so if you insist on a specific paper trail or are buying a bespoke item, it must be written into the contract. [read the post for the nuances of what essential means and some cases where the parties got it wrong!]

What should you do?

If this is all you need to create a contract, what is stopping you getting it written simply and agreed?

Cases: HHJ Toulmin in Felton Construction Limited v Liverpool City Council [2007] EWHC 3049(TCC), Hart Investments Ltd v Fidler & Anor [2006] EWHC 2857 (TCC)

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