What makes a contract legal in Maltese Law?

Get a deeper understanding of contracts and how they are recognised by the Maltese Law.

Maltese law defines a contract as a written agreement made between two or more parties. This agreement creates obligations that 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 is to keep contracts clear, exact, and carefully expressed in writing. They become more enforceable and recognisable in the eyes of the law.

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 have the contractual capacity and, in the eyes of the law, agree that there is an agreement.

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 all parties sign them, they become legally binding.

To be valid in the eyes of the law, all parties entering into the contract must be of sound mind and 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 considered when examining the validity of contracts are that all parties must agree to act in good faith. A contract can be revoked in the eyes of the law if there is consent 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 it comes to legislation covering the transfer of property and rental contracts.

Point of sale transactions is also a form of contract. Though there is no written agreement when one purchases over the counter, this is also regarded as a legally binding contract.