In order for a business contract to be considered valid, there must be:
- Offer and acceptance
- Consideration
- Capacity
- Consent
- Lawful Purpose
In every valid contract, offer, acceptance and consideration are vital aspects. First an offer is made that contains all the important and relevant terms of the contract in a clear and precise manner. Then the offer is accepted, after which something of value, either an object or service is exchanged between the parties as consideration. In every valid business contract, both parties must have the ability or capacity to understand the terms and nature of the contract. Therefore, anyone with a developmental disability, impaired judgement or who is not the age of majority in Canada (18 or 19 years) does not have the capacity to enter into a valid and enforceable contract. Each party involved in the business contract must freely consent or agree to the terms of the contract. That means that a contract is not valid if there has been misrepresentation, fraud, or undue influence. Finally. Canadian law requires that business contracts are lawful in their intent. In other words, no contract can be negotiated for a service or exchange that violates the law.
