We make contracts, bargains, deals and agreements every day in numerous ways. We often do it without even thinking. Giving someone a ride into town if he can help load a truck is a form of oral contract.
There are certain elements that every contract contains.
Here are the top five things you need to know about contracts.
1: The three basics: offer, acceptance and consideration. Someone has to make an offer to another person to buy, sell or do something. The person receiving the offer has to decide to accept it and there has to be consideration or something of value flowing between the parties for the entire deal to be valid. As an example, I will sell you my truck for $5,000 (offer). You agree (acceptance). You pay me the money and you get the truck (consideration). Without all three of these elements, you don’t have a contract.
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2: Land: land sales have special rules and have to be written. A verbal agreement for the purchase and sale of land is not enforceable in law.
3: Marital relationships: such contracts can include agreements setting rules under which you live in a common-law relationship.
They can include pre-nuptial contracts, as well as contracts settling your affairs after you break up with someone. Your ability to freely contract with your future, current or past spouse is restricted by law in most provinces.
To be binding and enforceable, the agreement needs to be written in a particular format. Each side must get independent legal advice before signing to ensure no one is taken advantage of. Trying to save money and not getting a lawyer in this sort of situation is false economy.
4: Internet: I get more and more calls about business dealings that occurred on the internet that have gone sour. It is a highly complex and difficult area of the law. You click on a button saying “Yes” or “I agree,” but I estimate less than five percent of my clients read all those terms first.
When you click, you are legally signifying that you agree to each and every one of those terms and agree to be bound by them. It is essentially like signing a contract. Be cautious and read everything before you click to signify your agreement when making internet purchases.
5: Breaking the law: You cannot enter into a binding contract to do something illegal. If you hire a hit man and he doesn’t do the job, you cannot sue him for breach of contract. It is against public policy to do so.
Contracts are a diverse and complex area of law, but knowing about these essential points can at least equip you to ask the right questions and get legal advice before you run into trouble.
Rick Danyliuk is a lawyer with McDougall Gauley LLP in Saskatoon.
