What is a contract?

Essential ingredients

A contract is an agreement between two or more people that is legally binding. Contracts can be verbal or written.

Offer

There must be an offer made, which is a proposal to enter into a contract.

Acceptance

The offer must be accepted and must always be communicated to the person who has made the offer.

Consideration

Consideration must have been given, for example there must be a price paid, or promise made in return or something else that proves that both parties give some value to each other. Gifts are not legally enforceable, since the recipient of a gift gives nothing in return.

Legal relationship

The parties must have intended to create a legal relationship.

  •  1 of 3