“voluntary exchange of promises, creating 

obligations that, if defaulted on, can be enforced and 

remedied by the courts”.

means that parties can enter into 

almost any type of contract they choose as long as the 

contract meets the common law requirements

stems mostly from the common law, 

however, there are a few areas which are specifically 

legislated (ie. sale of goods, consumer protection, 

employment, etc.)

a commitment by each party to do something (or 

abstain from doing something) – this is the price each side is willing to 

pay

each party must be legally capable of understanding and 

entering into the agreement (ie. infants, psychological, intoxication, 

etc.)

must be legal and not against public policy

both parties must intend that legally enforceable 

obligations will result from it. 

Contracts “under seal” 

inferred from actions of parties (ie. 

putting money in a vending machine)

an element is missing so the contract is not 

legally binding (goods must be returned to the seller)

exists and has legal effect, but one of 

the parties has the right to terminate the contract (seller may keep the goods if title has passed)

is one that is required to be in 

writing pursuant to the Statute of Frauds and is not.

involves the performance of an unlawful 

act an illegal contract is void; however, when a court finds a contract to be void on the basis that it is illegal it will not assist the parties by returning them to their original position unless one of the parties to the illegal contract is innocent

involves and exchange of promises (both 

parties have obligations and commitments)

a promise followed by an act (ie. offer 

of a reward for a lost item)

sets out the implied terms when goods are 

sold

the 

conditions which must occur prior to the contract completing

Offer to the world at large to enter negotiations

 This is not an “offer” as defined by contract law and it does 

not create a binding obligation (ie. advertisement for a 

particular product or service)

 Sometimes an offer may be inferred by conduct (ie. bringing a 

good and money to the cashier in a store is an ‘offer’ to 

purchase the good)

Offer must be communicated to the party accepting it

 You cannot accept an offer made to someone else or one that 

you did not know about

 Offers crossing paths in the mail that have the same terms 

cannot be considered a contract

 All important terms must be disclosed, so if a business wants 

to include disclaimer terms they must be reasonably brought 

to the attention of the customer at the time the contract was 

made. This applies whether the contract is implied (ie. 

parking in a private parking lot) or express (ie. renting a car). 

 Cannot accept an offer that you know is no longer available

Offer in place until:

1. End of a specified time – although the offeror is still free to revoke 

anytime in the meantime unless there is an option purchased

2. Expiration of a reasonable time

3. Death or insanity of offeror

4. Revocation of the offer by offeror anytime before acceptance – this 

must be communicated to the offeree to be effective

5. Rejection and counteroffer – terminates the original offer

6. Illegal activity – if the activity contemplated by the contract becomes 

illegal before acceptance, the offer is terminated

7. Goods Destroyed – if the goods being contracted for are destroyed prior 

to the acceptance of the offer, then the offer is terminated

exist in situations where there is a subsidiary 

agreement (ie. option agreement, tender laws)

 Contract is formed and the parties are bound by it at the point 

of acceptance.

 Acceptance is an ‘all or nothing’ proposition 

 You cannot accept only a portion of an offer or add terms to 

the offer – then it becomes a counteroffer and is not an 

acceptance

 Even a clear acceptance cannot correct an incomplete offer

Usually completed by communicating acceptance to the 

offeror

 May be accepted by conduct if the offeror indicated particular 

conduct to specify acceptance

 May be implied from conduct (ie. leaving a deposit on a car 

purchased)

 Unilateral contract – accepted by performance of the act 

specified in the offer

 Silence is not usually considered acceptance, however, when 

there is an ongoing business relationship it may be inferred.

 General rules that the offer is accepted and a contract formed 

when and where the offeror learns of the acceptance.

acceptance effective when and where dropped 

in the postbox, may avoid by specifying acceptance method

 Affects date of acceptance and jurisdiction of contract

 Acceptance sent by fax is not effective until received by the 

offeror (postbox rule does not apply)

 Likely will not apply to email communication either.

 Implications of new technology

 Postbox rule does not apply to offer or revocation of offer

 is the price one commits to pay for the 

promise of another – occurs at the time the exchange of 

promises are made (not necessarily the time they are 

delivered)

If an agreement is one-sided (only one side has obligations) 

then it is called a gratuitous promise or a gift – not 

enforceable, but there is still an obligation to do a good job

 Consideration does not need to be fair, but it does need to 

have some sort of legal value (ie. love and affection are not 

enough) and it needs to be specific

 If consideration is unfair between a business and consumer 

the courts may use concepts like unconscionability, fraud and 

mistake to review these transactions.

court imposed obligation to pay a 

reasonable price

To use promissory estoppel usually there is a contractual 

relationship which is modified by a promise. The promisor is 

usually trying to enforce the original terms of the promise and 

the promisee is using promissory estoppel as a defence