A contract does not exist until there has been a definite offer and an unqualified and unconditional acceptance of the offer communicated to the offerer. In conclusion, the law of contract describes the formation of a contract in terms of rules that order and define the process of contract formation. For a contract to be binding, the parties must come to the same determination, which must be disclosed by written or spoken words, or by some other signification of intention from which an implication of law, or an inference of fact, or both, may arise. Therefore, whatever a party’s real intention may be, if he or she acts in such a way that a reasonable person would believe that the party was assenting to the terms proposed by the other party, and if the other party, upon that belief, enters into an agreement with him or her, an enforceable contract will come into effect. However, rather than trying to find the real subjective intention of each party, the courts have generally applied the dispassionate and objective test of the reasonable man. 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). See Canadian Abridgment: CON.III.1 Contracts - Formation of contract - Consensus ad idem
#Agreement in principle contract law free#
More comprehensively, a valid and operative contract may be defined as an agreement free from vitiating factors such as mistake or misrepresentation, and constituted by the unconditional acceptance of an outstanding offer involving a reasonably precise and complete set of terms between two or more contractually competent parties, who intend to create mutual and reciprocal rights and duties that may be the subject of judicial sanction, if they are expressed in any required form, and are free from the taint of illegality or immorality, and are not subsequently discharged by law, by agreement, by breach, or by sufficient supervening circumstances. See Canadian Abridgment: CON.I.1 Contracts - Nature of contract - What constitutes contractĪ contract is a legally recognized agreement between two or more persons which gives rise to an obligation that may be enforced in the courts. I: Basis of ContractĬlick HERE to access the CED and the Canadian Abridgment titles for this excerpt on WestlawNext Canada
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