The 7 Elements of a Contract

Offer

Acceptance

Intention

to create

legal

relations

Consideration

Legal

capacity

Genuine

consent

Legality

objects

An#offer#is#a#statement#made#that#

shows#the#willingness#for#one#

party#to#enter#into#legally#binding#

relations#with#another.#It#can#be#

thought#of#as#a#proposal#being#

made#from#one#party#to#another.#

Where#the#person#who#the#

offer#is#made#to#mutually#

agrees#to#be#bound#in#a#

legal#relationship

Consideration#can#be#thought#of#as#the#

price#paid#in#return#for#the#promisor’s#

promise.#A#promise#will#only#be#legally#

binding#when#it#can#be#shown#that#

something#was#given#for#that#promise.#

The#something#can#be#anything#of#

value,#such#as#a#promise#in#return#or#an#

amount#of#money

it#is#necessary#that#the#parties#

to#a#contract#have#the#

intention#of#entering#the#

contract#and#being#bound#by#

the#contract.

Legal#capacity#is#the#ability#to:

•make#a#binding#legal#agreement

•sue#another#person

An#agreement#must#be#

entered#into#willingly#by#both#

parties,#that#is#there#must#be#

genuine#consent

Must#be#a#legal#contract,#that#is#it#

must#not#be#prohibited#by#law.#If#a#

contract#is#prohibited#by#law,#then#

the#contract#is#invalid#and#

unenforceable.

Elements of a contract Chart

Masters of Professional Accounting (CC57)

Central Queensland University

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