20 Jan 2014


This article is a timely reminder never to sign a document where agreements or promises are recorded unless you have made sure, with the benefit of legal advice, that it clearly and accurately:


(a)  identifies every party involved in the transaction;


(b)  states the legal roles and relationships of each party;


(c)  states what each party has agreed to do and for whose benefit or at whose request; and


(d)  provides that each party who promises something is promised something in return.


With some exceptions, most contracts are exchanges of legally binding promises.  In theory, contractual promises, or covenants, are legally binding because:


(a)  each party to the contract wants to be bound to their part of the bargain (in other words, the contract is voluntary); and


(b)  the parties to the contract have the same intentions about who is bound to do what under it (in other words, the contract is consensual).


Sounds simple right?  In theory, it is.  At least, that is, until a dispute arises as to a party’s intention to be bound by the terms of the contract (voluntariness) or what terms the parties intended to be bound to (consensus).

These matters can become complicated because of the rules about what evidence you can and can’t use to prove voluntariness and consensus.  Basically, the rules say that you cannot give evidence in a written statement or from the witness box about what you intended or whether your intentions were the same as the other party’s.

So, when you have what appears to be a written agreement, then generally speaking, the only evidence you can use to prove there was any intention to be bound to its terms, or what those terms actually mean, is the contents of the document itself.  There are exceptions to this rule: for example, where the words of the document are reasonably capable of being understood in more than one way or where the authenticity of the document is in dispute.  But in most cases, the rule applies.

However, the written terms are not the only part of a document that can be used as evidence of the parties’ intentions.  Signatures, handwritten words and other marks  that parties place on written documents can often give an insight into what the parties intended.  Sometimes, though, what a signature or other marking was intended to mean, and what lawyers and judges interpret them to mean, can be very different.

Take this example from a real case (the details of which have been altered):  Joe is the Managing Director of a company that provides professional services to the mining industry.  He is approached by the representative of a mining and exploration company to arrange a survey of a mining tenement and to analyse and report on the results of the survey.  Joe accepts this instruction and signs:


(a)  an agreement with the mining and exploration company to arrange and report on the survey; and


(b)  an agreement with a surveyor to survey the tenement and provide the survey data to Joe’s company for analysis.


The problem with Joe signing both contracts is that in fact, he never intended to be personally liable to pay the surveyor for its services.  In his mind, the surveyor was going to do the job for the mining company’s benefit, so the mining company should pay for it.  Meanwhile, though, the mining company became insolvent without paying the surveyor’s fee for its services. Later, when the surveyor’s lawyer looked at its contract with Joe, the lawyer noticed that Joe had:


(a)  signed the survey agreement in his own name without having taken legal advice; and


(b)  written what he understood to be the name of the mining company underneath his signature; but


(c)  got the mining company’s name just wrong enough to create confusion as to the mining company’s identity.


On this basis, the surveyor’s lawyer invoked the “undisclosed principal doctrine” which applies in this case because Joe did not tell the surveyor that it would be dealing with him as agent for the mining company.

 In these circumstances, the “undisclosed principal doctrine” says that the surveyor was entitled to assume that it was doing business with Joe personally and enforce its right to be paid again him.  The surveyor ended up suing Joe accordingly, even though, by then, Joe had told the surveyor that he had been acting for the mining company all along.  This is not surprising, since the mining company had gone bust!

As the above example shows, complex legal issues can arise where, for example, agency relationships are involved or promises recorded in a document are intended to benefit non-parties.  In all such cases, good legal advice is essential.


This is general information only, and does not constitute specific legal advice.

Murray Thornhill is the Director at HHG Legal Group with the Litigation/Commercial Law team. Daniel Morris is an Associate with the Litigation/Commercial Law team at HHG Legal Group. If you would like further details in relation to this information, please contact HHG Legal Group on 1800 609 945.

100 years of Supporting West Australians

"My family law experience with Mary Roubos has restored my faith in solicitors in general. She not only demonstrated her legal expertise and flair, but also showed a compassionate and understanding nature during the lengthy process. I felt that Mary went above and beyond her obligations as my solicitor, and really listened to me. I would highly recommend Mary and her assistant Debra Wilson, who also demonstrated professionalism and excellence on all levels."

Renee Frangiosa

"Always fast and thorough service. Thank you"

Sitka Pil

"I found Ben most helpful and always prompt to let me know where things were at. Will definately use Ben again and will recommend to others."

Gerrit and Mary Van Bralal

"We wish to express our thanks for your help in attending to our mother/ wife's will - Mrs Grace Margaret Vessey. Aimee was extremely helpful and easy to deal with. We are greatful for your help with our affairs."

Ms Rosalyn Norman, Mr Stephen Vessey

"Thank you ever so much for all your hard work on my case Nicole, I really appreciate everything you did for me."

Workers Compensation Client

"Thank you for such great assistance with the transaction of Flying Domestics on behalf of Lorna Good. It has been such such a pleasure to work with the HHG Legal Group and I look forward to working with you in the future."

Jim Goodwin

"Simon Creek and his team were at all times empathic, professional and confident.  My matter needed to be addressed within a pressing time frame, and their availability at short notice and contact after hours was much appreciated.  It caused me considerable stress, but having such a thoroughly reliable and competent team to call on helped me to feel in control. Although I hope not to need their services again in future, I would be confident in doing so!"

Dr Lana Bell

"A good outcome is what we can expect.  A great outcome is a sign of a company which does the very best for their clients. A very big thank you to Daniel Morris for showing empathy towards my small and much needed legal action.

To HHG Legal Group, thank you for a great outcome.  I would recommend your company to anyone seeking legal services."

Jan Atkinson

"Your support this morning was amazingly kind, not to mention your totally reassuring competence, knowledge and wisdom that you used on my behalf.  It was extremely reassuring to have your knowledgeable support, and I particularly appreciated your real and obvious kindness to me. It means so much at a very difficult time. I'm so grateful to you."

Family Law Client

"I highly recommend the services of HHG Legal Group for both personal and business needs. HHG is very up to date with legal advice and are in tune with the evolution of business."

Robert Forgione

"Sue and myself would like to thank HHG for the way in which our dispute was resolved. It is good to know that people who do not have an understanding of the legal system can rely on people like yourself and the company you represent. Without the assistance of HHG we could not have resolved the problems we were facing, not only have we resolved the issue but the outcome was more favourable then we would have thought possible. Thank-you and please pass on our thanks to all those who worked behind the scenes to achieve this outcome."

Rick and Sue Ashton

"Janene was very professional and we established a good rapport quickly. The subject of death and wills can be quite confronting to deal with, however Janene's approach was soft and accommodating."

Lynette Livesey

"A big thank you to HHG for their professional service, continued support, and wide range of legal knowledge. Our clients have given us nothing but kind words regarding HHG Legal Group and so we have no hesitation in referring and recommending Simon Creek and HHG Legal Group for their outstanding services and legal expertise."

Nigel Plowman, Director at McKinley Plowman & Associates

"Simon is a friendly and practical legal advisor. I have received great feedback from the clients I have referred to him and his team at HHG Legal Group."

Richard Beal, Director at BDO

"Over the last few years, I have been impressed by Simon’s legal ability, management skills, entrepreneurial spirit, personal integrity and people skills. He appears to be that rare breed of lawyer – both knowledgeable and commercial."

Michael Malone, Founder of iiNet

"Our family has been a client of HHG Legal Group over many years and most recently in 2013 and February 2014.  Business has included drawing up of wills for three generations and preparing of probate for my father in law.

I would have no hesitation in recommending HHG Legal Group to anyone requiring such services."

Bernice Climie

"You should be congratulated for the manner in which your staff address clients and we found our dealings with your company, once again a very pleasant experience and we would like to truly thank you for your efforts."

Steve Harvey and Jane Powell

"HHG Legal were absolutely fantastic. Extremely responsive and brought calm to our chaotic family situation through their knowledge and caring attitude. Extremely professional from our very first contact with them and they expertly guided our family though the required legal process over almost a 12 month period."

Amanda Williamson

"Fantastic team! They really care about their client. Tim Colcutt is a 'go that extra mile' guy who gives his client his all. I can't recommend HHG and Tim enough."

Kerry Samson

"Anne Hurley has been such a valuable resource of information and advice, her wealth of knowledge is truly impressive and her ability to explain things in a way that makes them easily understood is very much appreciated. Anne and the wider HHG Legal Group are always a pleasure to work with."

Giorgia Parham

"I had a fantastic lawyer in Anne Hurley. She helped me out a great deal with good, sound advice in a friendly , professional manner. First class, thanks Anne"

Graeme Hammond

"Marine Plant Systems has been working with HHG Legal Group for a few years now and they continually provide first class service. Their professional advice has been invaluable to our company."

Carolin Grimm

"We were kept up to date at all times. Pricing was always updated over the time period so we remained "in budget". Personal access to someone whenever I had questions. All in all a great experience without too much fuss."

Rosslyn Tasker - COO AltusQ Pty Ltd

"Good service you can count on."

Miles Lee

"HHG Legal Group have provided outstanding support as I have taken the journey of buying a business, their professionalism is beyound reproach. Their assistance throughout the Due Diligernce process have been invaluable, I would fully recommend them."

Mark Armitage

"I have experienced how good the HHG Legal Group team are over the last 6 years and highly recommend them."

Lyn Hawkins

"Very friendly and efficient service - what a pleasure working with Anne."

Jacques Taylor

"I highly recommend Daniel from HHG Legal Mandurah. When dealing with a complicated legal property matter recently I was extremely impressed by Daniel's honesty and integrity and the legal advice I received. I am very happy with the service from HHG Legal."

Tony Walker