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Feb 6, 2012 · Parties to a valid contract are always bound by law to carry out their promise. Should they fail to, the other party is free to go to court to force them to comply. At times, the court may order the defaulting party to do exactly what he had promised (specified promise).
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.
- Contract Defined. See Canadian Abridgment: CON.I.1 Contracts — Nature of contract — What constitutes contract. A contract is a legally recognized agreement between two or more persons which gives rise to an obligation that may be enforced in the courts.
- Consensus Ad Idem. See Canadian Abridgment: CON.III.1 Contracts — Formation of contract — Consensus ad idem. Since mutuality lies at the root of any legally enforceable agreement, a contract requires a meeting of the minds of the parties on all essential matters relating to it (consensus ad idem).
- Uncertainty and Incompleteness of Terms. See Canadian Abridgment: CON.III.1.b Contracts — Formation of contract — Consensus ad idem — Certainty of terms.
- Necessity for Formal Written Contract. See Canadian Abridgment: CON.III.1.b Contracts — Formation of contract — Consensus ad idem — Certainty of terms.
- An Offer. Mutual Assent: First and foremost, a valid contract must be formed based on mutual assent on the part of all parties to the agreement. Mutual assent is comprised of two components: an offer by one party (the offeror) and acceptance by another party (the offeree).
- An Acceptance. Acceptance, whereby the offeree agrees to the offeror's terms, is the second essential element of a valid contract, as it signifies the parties' mutual assent to agree to the agreement’s terms.
- Consideration. Consideration requires that both parties in a contract provide something valuable or limit their liberty. This mutual exchange binds each party, ensuring the enforceability of the agreement and distinguishing it from mere promises that are not enforceable.
- Legal Capacity. A contract will not be valid unless all parties involved have the capacity to understand the terms and consequences of the agreement because, as mentioned above, the formation of a contract relies on mutual assent, which an incapacitated party cannot reach.
In Canada's common law provinces and territories three components are required for the formation of a valid contract: offer, acceptance, and consideration. Additionally, the parties themselves must have the legal capacity and the intention to create legal relations.
Apr 28, 2020 · Will an Oral Contract Stand Up In Court? A verbal contract may stand up in court if the proper contractual elements are present and the Court finds that it is a valid contract. In order to have a valid legal contract (written or verbal) the following contractual elements must be present: An intention to enter into legal relations.
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Oct 24, 2020 · 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.
