A contract is a legally enforceable agreement between two or more parties. For most contracts to be binding, four elements must be present: offer, acceptance, consideration, and mutual intent to be bound.
1. Offer
An offer is a clear proposal made by one party to another. It must be definite enough that acceptance creates a binding agreement. Advertisements and price quotes are usually invitations to negotiate, not offers.
2. Acceptance
Acceptance is the unequivocal agreement to the terms of the offer. Counteroffers or conditional responses generally do not count as acceptance.
3. Consideration
Each party must give something of legal value. This can be money, goods, services, or a promise. A promise to give a gift without receiving anything in return is usually not enforceable as a contract.
4. Intent
Both parties must intend to create legal relations. Social or domestic agreements are often presumed not to be legally binding, while commercial agreements are.