Consent to the contract must be freely given. CapacityĪll parties must have the ability to understand the terms of and any obligations under the contract. What constitutes adequate acceptance will vary depending on the type of contract. Staying silent is not generally considered acceptance unless it is clear that acceptance was intended (eg by way of conduct, like paying for a product). Any negotiations between the parties are counter-offers, not acceptance.
![4 elements of a valid contract 4 elements of a valid contract](https://media.cheggcdn.com/media%2Fbce%2Fbce9b64b-74cc-4069-9fac-4a7d9d56a815%2FphpXsjPyw.png)
If they were, then the advertiser would have to provide everyone who 'accepted' them with the product regardless of stock levels.Īcceptance of the offer must be unconditional (eg a signature on a Contract of employment) and it must be communicated. For example, advertisements, catalogues and brochures where prices of a product are listed are not offers but invitations to treat. An offer is different from an ‘invitation to treat’ which only invites someone to make an offer, and is not intended to be contractually binding. An offer is a statement of terms to which the person making the offer is prepared to be contractually bound. AgreementĪn agreement happens when an offer is made by 1 party (eg an Offer of employment) to the other, and that offer is accepted. For a contract to be valid, it must have four key elements: agreement, capacity, consideration, and intention. Keep these elements in mind to ensure that your agreements are always protected.