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What are the five elements of a valid contract?
Consensus, consideration, capacity, legality, and intention.
What is consensus?
Mutual agreement to commit to a certain transaction.
Assumed to have negotiated on equal bargaining positions
Involves offer and acceptance
What is consideration?
Commitment of each party to do something or abstain from doing something.
The price each party is willing to pay to participate in the contract.
What is capacity?
Parties must be capable of understanding and entering into the agreement.
Limitations in Contracting capacity have been placed on infants, insane or intoxicated persons aliens and Native Americans (pursuant to the Indian Act).
What is legality?
The object and consideration involved in the agreement must be legal and not against public policy.
What is intention?
Both parties must be serious when making the agreement.
Both must intend that legally enforceable obligations will result from it.
Are verbal agreements binding anaphora and enforceable?
Yes, however some legislations requires certain types of agreements to be evidenced in writing.
What is formal contract?
A formal contract is sealed by the party to be bound by it, traditionally a wax seal is used.
What is a simple contract?
A simple contract or parole contract is inferred from the conduct of the parties. Portions of an express contract can be implied.
Vending machines
What is an express contract?
What's an express contract parties have expressly stated and their agreement verbally or in writing.
Real estate contracts, employment contracts
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