Making a contract

First, let’s go over the basics of a contract:

• the parties must agree on the terms, having a “meeting of the minds”   

• there must be an exchange of something of value

• both parties must intend to be bound by the transaction

Let’s unpack each of these elements.

When two people are on the same page about something, when each just “gets” what the other one means: that’s a “meeting of the minds.” In contract law, a meeting of the minds happens when one side makes an offer and the other side accepts it. They’re in agreement about what they’re agreeing to.

There can be conversations leading to an agreement, as the two sides get closer to a deal before finally agreeing. Or it can happen without any real formalities, like when you buy something from a shop. Offer, acceptance: done.

The offer must be so clear that the other party can accept it simply by saying “yes.” So a generic “For Sale” sign on a used car isn’t an offer because the terms aren’t clear. There’s no price. 

Up until an offer is accepted, the person making it can withdraw it at any time. But a binding contract happens the moment a standing offer is accepted. 

The acceptance of the offer must be an acceptance of, well, that specific offer. Any response that changes the terms (“You want $100 for that lawnmower but I’m willing to give you $75”) is considered a counteroffer. Now you’ve pushed reset. The counteroffer is a new offer, and no contract is formed until the other person accepts it.

An exchange of value (your lawyer friend would call it consideration) means that each party gets and gives something. It doesn’t have to be an even deal, nor does it have to be for money — you can sell your bike in exchange for, say, a week of dog sitting. But if you get a bike for free, you may have a hard time calling that transaction a contract.

For an agreement to be legally enforceable as a contract, both sides must intend to be bound by their promise. This doesn’t happen out loud; it gets inferred from behavior.

For example, offering a friend a ride in your car isn’t typically a contract. But what if you drive a colleague to work three days a week in exchange for $20 each week towards gas? That’s looking like a contract. If you don’t show up one morning, they might be in the right asking for the gas money back. 

If you aren’t capable, you can’t make a contract. Capable means you understand the terms and want to be bound by them. If you have a disability, or if you don’t speak the language used in the contract, you may not be capable.

A person of any age can enter into a contract in BC. But special rules apply to minors (those under age 19), as explained in the common question below.

You can’t enforce a contract for something illegal, like for the sale of illegal drugs. (You can also get in trouble with the authorities!)

In most cases, no. A contract is the agreement between people; a written document is usually just proof of the agreement. But some kinds of contracts must be in writing. For example:

• When real property is involved 

• Any guarantee, which is where one party agrees to pay the debt of another person if they default on payment

• A sale made online or over the phone — where there’s no opportunity to inspect the goods

• A door-to-door sales contract

• A payday loan agreement

These situations are explained more fully here.

Agreements made in emails can be valid contracts, just as oral agreements can. It makes no difference if the agreement is set out on paper or in an electronic format. It also doesn’t have to be signed to be valid. Acceptance can be inferred from behaviour (or writing). An email may be the entire agreement or part of an agreement. 

If someone gives you a quote, and you agree, that locks in the price. They can’t now charge you more. You made a contract.

An estimate is different. An estimate is just a seller’s “best guess” at a final cost. Could be a little less, could be a little more. If the estimate is within 20% of the final price, that’s usually considered close enough; the contract is likely enforceable. If the final price comes in more than 20% over the estimate, you have an argument not to pay in full.

Yes, but special rules apply to those under age 19 (called minors).

A minor can enforce a contract, but generally speaking, a contract can’t be enforced against them. So if you hired your friend’s 17-year old to paint your fence, the teen can get out of the contract without any penalty. 

Though there are some exceptions to this. If the contract is essential for the minor’s well-being (like, say, leasing an apartment), then the contract can be enforced against them. And once they reach 19, if they agree to be bound by or start performing their end of the bargain, then it becomes an enforceable contract.