A contract may be defined as an agreement between two or more persons that is enforceable at
The Elements of a Valid Contract
The requirements are referred to as the elements of a valid contract and consist of:
An intention to create a legal relationship
Capacity to contract
In addition to these six basic elements, to be enforceable, certain types of contracts
must be in writing, in an electronic substitute, or take on a special form.
In general, however, all contracts must have the six elements present to be valid and
Contracts must also be free from any vitiating elements, such as mistake,
misrepresentation undue influence or duress.
The Intention to Create a Legal Relationship
Closely related to the intention of the parties to be bound by their promises is the notion
of consensus ad idem or agreement as to the subject or object of the contract.
The first requirement, then for a valid contract, must the intention on the part of the
promisor to be bound by the promise made.
This intention to create a legal relationship is an essential element of a valid contract.
The intention to create a legal relationship is a presumption at law, because the creation
of the intention would otherwise be difficult to prove.
The reasons for presumption - that strangers who make promises to one another intend
to bound by them - is essentially an approach that permits the courts to assume that
the promises are binding, unless one or both of the parties can satisfy the courts that
they were intended to be so.
An Advertisement Creates a Landmark Law
For example, promises made between members of a family would not normally be
considered to be an enforceable contract.
As well, generally speaking, advertisements in newspapers, magazines, and other
written media are not normally taken as enforceable promises that are binding on the
As a general rule, the courts view an advertisement (or for that matter, any display of
as a mere intention to do business, rather than an intention to enter into a
contract with the public at large.
An advertiser is not normally bound by the claims set out in an advertisement