Articles

Articles

What makes a contract legal in Maltese Law

Maltese law defines a contract as a written agreement made between two or more parties which creates obligations which are subject to enforcement and recognition in the eyes of the law.

The obligations set out in a contract agreement can deal with anything from buying and selling goods, property and services to terms and conditions of employment, management, and settlement of disputes.

One of the most important things to keep in mind when entering into a contract is that they are much more enforceable and recognisable in the eyes of the law if they are clear, exact and expressed carefully in writing.

Under Maltese law, contracts fall under the umbrella of the Law of Obligations. Broadly, one can say there is a contract when all parties relevant to the agreement are in possession of contractual capacity and, in the eyes of the law, agree that there is in fact an agreement.

It goes without saying that all parties must be signatories to the written agreement. Contracts must be signed in the presence of a witness and a notary and/or lawyers representing both parties. Once they are signed by all parties, they become legally binding.

In order to be valid in the eyes of the law, all parties entering into the contract must be of sound mind and also have the mental capacity to understand the terms of the agreement. As mentioned above, all parties must be aware of the contents of the contract (hence the need for legal representation).

All parties to the contract must also be over 18 years of age, otherwise the contract is null and void in the eyes of the law.

Other factors that are taken into account when examining the validity of contracts is that the agreement must be entered into by all parties with the intention of acting in good faith. A contract can be revoked in the eyes of the law if there is consent to do so by all involved parties.

Contracts are not grouped under one particular law in Malta. Maltese Law has specific frameworks for different types of contracts. Employment contracts, for example, are regulated by the Employment Act.

The Insurance Business Act covers contracts entered into between insurers and their clients. Maltese law is also specific when in comes to legislation covering the transfer of property and rental contracts.

It must also be noted that point of sale transactions are also a form of contract. Although there is no written agreement when one makes a purchase over the counter, this is also regarded as a legally binding contract.