Primarily it is the ‘offer and acceptance’ that decide the existence of a contract. An acceptance must be absolute and unconditional. Unless an inference can be drawn from the facts that the parties intended to be bound only when a formal agreement had been executed, the validity of the agreement would not be affected by its lack of formality. Once the contract is concluded orally or in writing, the mere fact that a formal contract has to be prepared and initialled by the parties would not affect either the acceptance of the contract so entered into or implementation thereof, even if the formal contract has never been initialled.
The Supreme Court further held that in the absence of a signed agreement between the parties, the existence of a contract can be inferred from various documents duly approved and signed by the parties e.g. exchange of e-mails, letter, telex, telegrams and other means of telecommunication.
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