Two recent decisions have applied well-established common law principles in determining whether parties have entered binding contractual arrangements.

When parties are intending to enter into a written contract to capture their agreement, a question can arise as to whether they have entered into a legally binding contract at a certain point in time, despite the fact that a written contract is still to follow. Australian case law recognises that in some circumstances parties intend to be bound immediately by some or all of the agreed terms, with a later agreement to formalise, expand, or replace the existing agreement; or in other circumstances do not intend to be bound until the written contract is signed. These circumstances fall into four categories, now commonly referred to as the Masters v Cameron categories, and courts will consider which category applies based on the facts and evidence.

In Angelis v CP Pty Ltd (No 2) [2026] FCA 623, the Federal Court of Australia (FCA) held that a binding loan agreement was created notwithstanding the parties had not entered into a written contract. In reaching this finding, the FCA considered it significant that the documentary evidence and parties’ conduct was consistent with an objective intention that a contractual agreement was on foot. Consequently, the FCA was satisfied that the loan agreement and surrounding facts were consistent with the fourth Masters v Cameron category, being that parties intended to be immediately bound, with the expectation that more fulsome and additional terms, such as interest on the loan, would be documented at a later date.

In Papanastassis v Papanastassis [2026] VSC 302, the Supreme Court of Victoria (VSC) held that at the time the plaintiff’s solicitors sent an executed deed to the defendant’s solicitors, it was the parties’ objective intention to be immediately bound by the terms of the deed, notwithstanding that the defendants were yet to execute the deed. The VSC noted that the deed reflected the parties’ intentions to conclude the negotiations, including in relation to the defendant’s “immovable position” concerning payment timing, the defendant’s solicitors had provided the deed to the plaintiff’s solicitors for execution, and neither party explicitly communicated an intention to only be bound upon both parties executing the deed. Ultimately, whilst the VSC applied the Masters v Cameron line of case law, it was not necessary for the VSC to categorise the deed into one of the four categories of agreement given a formal document had already been drawn up and the parties’ conduct reflected an intention to immediately create a binding agreement.

The FCA decision can be found here and the VSC decision can be found here.