What Is a Binding Agreement?

Most people assume that without a signature, there’s no contract. It’s one of the most common — and most costly — misconceptions in Australian law.

The reality is that Australian contract law does not require an agreement to be in writing for it to be valid. What matters is whether the agreement meets the essential requirements of a contract. That means a quote you accepted over email, a verbal “yes, go ahead” over the phone, or even a series of text messages could already have you legally bound — whether you intended it or not.

Under Australian law, a binding agreement generally requires an offer, acceptance, consideration, an intention to create legal relations, capacity, and certainty of terms. Strip away the legal jargon, and what that means in practice is this: the moment all those elements are present, an enforceable obligation can arise — long before a formal contract is ever signed.

For owners’ corporations, strata committees, builders, and anyone managing property or construction work, the stakes are particularly high. Construction disputes frequently arise when verbal promises conflict with written contract terms, making documentation critical for both homeowners and builders.

In this episode of the Strata Law Podcast, Sachs Gerace Lawyers’ own Despina Veleski unpacks what a binding agreement really is, how everyday communications can create enforceable obligations, and — most importantly — how to protect yourself before you find yourself in a dispute you never saw coming.

Not sure whether your agreement is legally binding? Contact Sachs Gerace Lawyers for expert advice before a dispute arises.