Contract Law: Elements of a Contract

Review of the definition and core elements of a contract.
Explanation of how contractual intention is proven in court, including the general test, court presumptions, and when these presumptions apply or do not apply.
Detailed breakdown of each element of a valid contract: intention, offer and acceptance, consideration, capacity, legality, and formal requirements.

Definition of a Contract: An agreement between two or more parties that is recognized by law and enforceable.
Elements of a Valid Contract:
1. Intention to contract.
2. Offer and acceptance.
3. Consideration.
4. Capacity.
5. Legality.
6. Formal requirements (applies only in specific situations).

What is Intention to be Legally Bound? It refers to the parties' willingness to enter into a legally enforceable agreement, signifying that they intend for their agreement to have legal consequences.
Proving Intention (Presumptions and Onus of Proof):
- Presumption: A shift in the onus of proof regarding intention.
- When the Presumption Applies (Intention is Presumed):
  - Business or Strangers: Applies to 'at arm's length' and commercial transactions. In these scenarios, courts generally presume that parties intend to create legal relations.
- When the Presumption Does Not Apply (Intention is Not Presumed):
  - Family and Friends: Agreements among family members and friends are generally presumed not to have a legal intention unless there is clear evidence to the contrary (e.g., as seen in Merritt v. Merritt).
  - Advertisements: Advertisements are typically considered 'invitations to treat' rather than offers demonstrating an intention to be legally bound, unless they are exceptionally clear and specific, as in Carlill v. Carbolic Smoke Ball Co., where a reward was offered clearly and unequivocally.

What is an Offer? A clear, unambiguous, and definite proposal to enter into a contract, made with the intention to be bound if accepted.
Terms:
- Offeror: The party making the offer.
- Offeree: The party to whom the offer is made.
Offer vs. Invitation to do Business/Treat:
- An offer is definite and indicates a willingness to be bound.
- An invitation to treat is an expression of willingness to negotiate or receive offers, but not an offer itself. Examples include:
  - Auto Trader/Sobey's flyer: Generally considered invitations to treat, inviting customers to make offers.
  - Auction: The auctioneer's call for bids is an invitation to treat; each bid is an offer.
  - Door Crasher (advertisement): Unless explicitly stating definite terms like