The Law Relating to Contracts
An agreement to rent a place to live is a contract. When you enter into a contract you undertake legal obligations and agree to certain rules in your relationship with the other party to the contract. The significance of the obligations that each party agrees to is two fold:
- The obligations become the rules that the parties must live by.
- If either side breaks an obligation or a rule of the contract, they are at risk of facing some kind of a penalty.
What is a legal contract?
A legal contract is an agreement between two or more people that the law will enforce.
In order for the law to enforce the agreement, the contract must have certain characteristics:
- The contract is made between people that the law considers able to make valid contracts.
- There must be a valid and clear offer to make a contract and an acceptance of the offer.
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For example, a landlord may give you a lease setting out the terms of the agreement he is offering to you. You signify your acceptance by signing the lease. |
- Both parties to the contract must receive something of value, legal consideration, for their agreement. For example, in a rental agreement, the landlord receives the rent and you as the tenant receive the right to live in the apartment.
If an agreement does not have all the above characteristics it is not a valid contract and cannot be enforced by law.
Does a contract have to be in writing?
A contract does not have to be in writing. An oral or spoken contract is valid as long as it has the legal characteristics of a contract. A written contract however will provide a record of the terms the parties agree to. In cases of disagreements, the agreements made in an oral contract are much harder to prove.
How does the law of contract affect agreements to rent a place to live?
The law of contract has many rules that deal with the ways in which contracts are made, interpreted, carried out, broken, and ended. The law of contract applies to agreements to rent a place to live, unless the law has been changed by an Act of the Legislature.
Once you become a party to a valid contract, you undertake legal obligations. For the purposes of agreements to rent a place to live, there are two kinds of obligations:
- Obligations that you and the person you are contracting with agree to. These obligations will be set out in the contract, if it is written. For example, obligations about repairing the property.
- Other obligations may be implied by the Residential Tenancies Act and apply automatically, whether they are in writing or not, and whether you and the other party have discussed them or not. For example, the obligations for a tenant to pay rent on time and for a landlord to keep the premises to Public Health Act standards.
May 2005