From the Paddock to the Courtroom: The Importance of Securing a Handshake Deal with a Contract

The increased use of technology can mean that a quick ‘handshake deal’ made out in the paddock and your correspondence afterwards may lock you into a legally binding agreement on terms you didn’t even know you agreed to!  Increasingly, the Courts have considered communication through text messages, audio-visual links and emails as evidence of a contract increasing the risk of that ‘quick chat on the cattle farm’ transforming into a binding deal. Let’s look at some recent examples.

Online Group Chats

A 2024 Victorian case highlighted the importance of securing any agreement in a contract, because the text messages sent in a group chat after an alleged oral agreement were directly relevant to issues that were in dispute. This was the case of LL UP Pty Ltd v Kegland Distribution Pty Ltd (Kegland)¹.

In Kegland, the audio and text messages exchanged in a group chat titled ‘Fight the Landlord’ formed part of the evidence which pointed towards the existence of an oral agreement and the creation of a trust².Justice Croft found the group chat rendered the cross-examination evidence of the second plaintiff and their witness as implausible³.

If you have made some form of arrangement out in the field, please know that your messages exchanged afterwards do not enjoy the protection of privacy. Should anything go wrong, a contract will better protect you and ensure that you are only bound to the agreed terms. As the digital literacy of Courts increase, the lines between informality and communicative evidence will continue to blur.

Unsent Text Messages

Naturally, one would assume that a text message which has been drafted and not sent to its intended recipient would not bound the intended sender to its contents. Justice Brown examined this issue in the Queensland case of Re Nichol (Nichol)⁴.

In Nichol, the deceased’s mobile phone was found by the applicant on a work bench where the deceased’s body was found. On the mobile phone, was an unsent text message in which the deceased drafted a message to send to his brother which set out his testamentary wishes and ended with the words ‘Mywill’⁵.The applicant took a screenshot of the unsent text message and this was used as evidence of the deceased’s intended distribution of his estate.  

Justice Brown relied on the case of Re Yu ⁶, which held that documents that had been created on an iPhone constituted a document for the purposes of section 5 of the Succession Act 1981 (Qld) ⁷. The Court, in this case, was satisfied that the unsent text message was an electronic document and that it satisfied the definition of a document ⁸.

This decision demonstrates the powers of the courts to validate a document, in this case being a will, where it does not meet the conventional procedural requirements.

Secure the Deal with a Contract

Very recently, the NSW Supreme Court of Appeal in the case of XJS World Pty Ltd v Central West Civil Pty Ltd ⁹, considered whether an external quotation form, that set out a schedule of rates ¹⁰, formed the completion date term within the primary contract. Ultimately, the Court concluded that the terms of the quotation form were an ‘an expression of hope and not a contractual obligation’ and therefore did not form the terms of the primary contract ¹¹. So if you want that deal to go ahead, before you shake on it, make sure you have all your agreed terms in writing.

Key Elements to Takeaway

Whilst the wide range of enforceability in Australia’s legal system may seem restrictive, being aware of and understanding the key elements of a contract can protect farmers from the deceptively enforceable communication platforms. The elements of a contract can exist in many forms. Not all contracts present in the ‘standard form’ of a written agreement. A valid contract merely requires an offer, acceptance and consideration.

To avoid misunderstandings or circumstances where conversations not intended to be binding are enforced, it is important that commercial undertakings and/or any agreements are set out clearly as a written contract.

Whilst yes, an agreement not made in writing may be legally valid and enforceable, a mere ‘handshake’ deal with no formal contract could be risky and could leave parties without essential rights, that would otherwise be available under a standard form written contract. In a world where read receipts and emojis could establish legal acceptance and an unsent text on an iPhoneis considered a ‘document’, don’t let convenience erode clarity.

‍

‍

‍

References

¹ LL UP Pty Ltd vKegland Distribution Pty Ltd[2024] VSC 651.

² n 1 [274].

³ Ibid.

⁴ Nichol v Nichol& Anor [2017] QSC 220.

⁵ n 5 [13].

⁶ [2013] QSC 322 at [4]-[5].

⁷ Succession Act1981 (Qld) s 5.

⁸ n 5 [41].

⁹ XJS World PtyLtd v Central West Civil Pty Ltd [2025] NSWCA 133.

¹⁰ n 11 [24].

¹¹ n 11 [27]-[28].