How contract law works

A contract is a legally binding agreement between two parties. A contract is valid and enforcea­ble if the agreement contains sufficient evidence of the following elements:

• an offer and an acceptance;
• a common intention between the parties to create a binding legal agreement;
• the giving of ‘consideration’ for the promise;
• legal capacity of the parties to act;
• genuine consent of the parties; and
• legality of the agreement.

An agreement that lacks one or more of these elements is not a valid contract.