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Feb 6, 2012 · Published Online February 6, 2012. Last Edited October 30, 2020. A contract is a legally binding agreement between two or more persons for a particular purpose. It is an instrument for the economic exchange of goods and services. In Canada, contract law is administered both in common law and, in Quebec, civil law.
- Offer. Offer and acceptance analysis form the basis of contract law and the formation of a valid contract. Developed in the 19th century, the offer and acceptance formula identifies the point of formation, where the parties are of 'one mind'.
- Acceptance. Acceptance is an agreement to the specific terms of an offer. Mario Iveljic, a partner at Mag Mile Law, LLC explains that there is not one way of validly accepting a contract - generally, an offeree can accept an offer in any reasonable medium as long as the country or state does not require any specific form.
- Intention to Create Legal Relations. An agreement does not need to be worked out in meticulous detail to become a contract. However, an agreement may be incomplete where the parties have agreed on essential matters of detail but have not agreed on other important points.
- Consideration. As Nelson Johnson, an attorney at Griffith, Lowry & Meherg, LLC puts it: if there is no consideration, there is no contract. Without consideration, the contract is both unenforceable at equity and in law[1].
Understanding the principles of contract law helps clarify how contracts are formed and enforced: Mutual assent: both parties must agree to the contract terms willingly. Definiteness: the terms must be specific enough to be enforceable.
To be valid and enforceable, contracts generally require seven main elements: Offer – One party must make a clear and unequivocal offer to enter into a contract. Acceptance – The other party must accept the offer, either by agreeing to its terms or by performing the actions required in the contract.
- Offer. An offer is the tentative promise that begins contractual negotiations. It is when one party to a contract initiates and indicates a desire to enter into a relationship with another party.
- Acceptance. When an offer is made, acceptance of the offer generally requires positive conduct meaning that the acceptance is deemed only to have occurred when the accepting party acts in some way or form that confirms acceptance.
- Consideration. Consideration as an element to a legally binding contract is without the same meaning as the word consideration in common language. While giving careful thought, being the common language meaning of the word consideration, is prudent in contractual negotiations, the word consideration as it applies to contract law means the existence of a value for value exchange between the parties to a contract.
- Intention, ad idem (meeting of the minds) The element of intention involves a genuine desire to establish legal relations. Where a reasonable bystander listening to negotiations would fail to perceive sincerity among one or more of the parties, formation of a contract has failed; and accordingly, the element of intention requires an objective rather than subjective review as was confirmed in, among others, the case of West End Tree Service Inc.
Oct 24, 2020 · Consideration is something of value given in exchange for a promise. A contract would clearly state what is being sought, and for what consideration. Mutual Agreement: This is an essential element of a valid contract. For a contract to be valid and legally enforceable, the parties to the Contract must agree on the same terms in the same sense.
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Sep 6, 2024 · This is a conditional acceptance, as the original contract's terms are no longer valid. 3. Consideration. In contract law, consideration refers to something of value, like money, goods, services, or promises that are exchanged between the parties. Think of it as a “quid pro quo” scenario that categorically makes the contract valid.
