offer + acceptance + consideration = contract
For a contract to become enforceable, there needs to be an offer (from the offeror), acceptance (from the offeree) and consideration.
Consideration
In common law, consideration is the exchange of one thing of value for another. It must be legally sufficient and bargained for by the receiving party.
Often money, consideration can be anything of value to the parties. Both parties must provide consideration to each other. Party A may
agree to provide English classes (as consideration) to a student who agrees to pay for them (as consideration). Consideration can take the form of
of money, work, food and shelter.
Expressed and implied contracts
A contract can extend beyond formal legal documents. It can be an oral, written agreement or expressed through written correspondence over a period of time. (expressed)
In the case of where there is no conversation or documents, there may be an implied contract through conduct of the parties. If someone drive s a car into a garage and fills their car with petrol, it can be said that the conduct has implied an agreement to contract with the garage although nothing was was said between the parties beforehand.
Essential terms
For a contract to be enforceable, parties must agree on essential terms such as price and subject matter. In the absence of a written agreement, courts can deem conduct as creating certainty for the terms of the contract.
Defences to contract formation
There may be instances where a party will argue that a contract does not exist, these include:
illegality
When the subject matter of the contract is illegal. This may be for example illegal drugs or illegal act.
fraud
This can because a party has presented information that is deceitful causing the other party to rely on that information and enter the contract.,
duress
When a party uses threat or force to induce the other party into an agreement
lack of legal capacity
If someone does not have capacity such as being insane or not of legal age, they do not have the capacity to enter into a contract.