There are three methods by which a contract may be formed:
- express written agreement;
- express oral agreement;
- conduct of the parties – the terms of the contract, though not expressed, can be held to exist because of the conduct of the parties and custom and practice.
Two principles govern the formation of a contract.
- Offer: there must be a clear and specific offer of employment by the employer to the prospective employee. It is advisable from the employer’s point of view that all conditions attached to a job offer are clarified with, and understood by, the prospective employee before a firm offer is made, ideally in writing.
- Acceptance: a contract of employment comes into existence once acceptance is formally indicated. It is important to note the time of acceptance, as the offer may be withdrawn at any time before, but not after, it is accepted, except where both parties agree. The benefit of requiring a clear acceptance by the employee is that this establishes a firm and documented basis for the contractual relationship.