Casual Legal: "Just sign here..."

By Jenna Chamberlain
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

While parties frequently attempt to argue that a contract is only legally valid and binding if it has been signed, this is not necessarily the case.

The legal test for determining whether a contract is valid and binding is as follows:

• Step 1: Was there an offer?
• Step 2: Was the offer accepted?
• Step 3: Were the parties certain of the terms of the contract?
• Step 4: Was there “meeting of the minds”, which means the parties understood and agreed to the same terms?
• Step 5: Was there consideration from both parties?

A signature on a contract is strong evidence of these elements, but it is not a requirement, unless required by either legislation or contract.

Section 213 of the Municipal Government Act governs the signing or authorization of municipal documents, including agreements, as follows:

• (4) Agreements and cheques and other negotiable instruments must be signed or authorized
• (a) by the chief elected official or by another person authorized by council to sign them, and
• (b) by a designated officer, or by a designated officer acting alone if so authorized by council.

This section requires that municipal agreements be authorized by certain individuals to be binding on the municipality, but it does not require a signature.

Overall, the best practice is to ensure contracts are signed by both parties. This is clear evidence that the parties have agreed to enter into a contract. However, if for some reason a contract is not signed, this will not necessarily have an impact on the legal effect of the agreement if there is other evidence that the parties came to a consensus.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or send an riskcontrol [at] abmunis.ca (email) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.