Legal Question in Consumer Law in Australia
Contract Law
If a Person goes into a contract to give sole distribution rights to a company, but it states ''This agreement is intended to be binding in honour only, and not a legally binding agreement'', will he be able to change distributors without facing any legal action? Thanks
1 Answer from Attorneys
Re: Contract Law
This issue relates to the intention of the parties at the time the contract was made.
If the parties did not intend to create legal relations there is no contract. One of the basic issue that is indicative of a contract is an intention to create a legal relationship.
The issue has to viewed in the context the negotiations that took place before the document was signed.
The statement in the document that there is no intention to be legally bound is a fairly strong indication that there is not a contract and as such another distributor could be appointed.
It is a complex issue and you should take formal legal advice after giving proper instructions.
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