What is a legal contract?
A legal contract is an agreement the law will enforce. For the law to enforce the agreement, the contract must meet the following requirements:
- The contract must be between parties who have legal capacity. For example, a person must understand the nature of what they are agreeing to, not be under the influence of drugs or alcohol, and be 18 years or older. (Though there are some exceptions for contracts with minors.)
- One party must clearly offer to make a contract and the other party must clearly accept the offer. Making a counter-offer means making a new offer that the original offeror can choose to accept or not.
- Each party must give consideration. This is a lawful exchange of value, such as money, services or goods. For example, in a rental agreement, the landlord’s consideration is to provide the premises and the tenant’s consideration is to pay the monthly rent.
- The parties must intend to be bound by the agreement when it is accepted.
- There must be certainty of terms between the parties to the contract. This means each party must know what the terms of the contract are.
- The contract’s purpose and consideration must be legal. For example, an agreement to sell illegal drugs is not for a legal purpose and consideration and will not be enforceable.
Parties to a contract may be individuals or corporations.
If an agreement is missing any of these elements, it is not a valid contract and the law will not enforce it.
Learn more about contracts in our LawNow article: Introduction to Contracts
Last reviewed: June 2024
Does a contract have to be in writing?
A contract does not have to be in writing to be valid and enforceable.
An oral or spoken contract is valid as long as it meets the requirements of a contract (described in the question above). If one party challenges the terms of the contract, it can be more challenging to prove what the contract said without a written record, especially if each party has different versions of what was agreed to.
It is a good idea to put your contracts in writing to have a record of the terms you all agreed to.
Last reviewed: June 2024
How does the law of contract affect agreements to rent a place to live?
Contract law covers how contracts are made, interpreted, performed, broken and ended. When you enter a valid contract, you take on legal responsibilities.
A rental agreement is a type of contract between a landlord and a tenant. It creates legal obligations for both the landlord and tenant.
In rental agreements, there are two types of obligations:
- Obligations that the landlord and tenant agree on and include in the rental agreement. For example, the amount of the security deposit and monthly rent, and the length of the lease.
- Obligations that automatically apply by law, even if the landlord and tenant do not discuss them or do not include them in a written rental agreement. In Alberta, these are largely set out in the Residential Tenancies Act. For example, how often the landlord can increase the rent, that the landlord must provide a safe and livable property and that the tenant must not damage the property.
Learn more about rental laws on CPLEA’s Laws for Landlords and Tenants in Alberta website.
Last reviewed: June 2024
What is a lemon law?
Lemon law is a term used in the United States for consumer protection laws that help people if they buy a defective product, often a vehicle. These laws give consumers rights if a vehicle they purchase turns out to be a “lemon.”
Each state has its own specific lemon laws. In some places, these laws protect consumers even if they have a warranty with the seller. Lemon laws may also apply to other products, like computers, depending on the state’s laws.
Last reviewed: June 2024
Do lemon laws exist in Canada?
Not in the same way they do in the United States.
In Canada, consumer protection differs from the United States. Each province has its own legislation that intends to protect consumers when they buy goods or services. There are laws about fair trading, defective goods, and more. In Alberta, this is the Consumer Protection Act – read our FAQs about this piece of legislation.
Some industries have processes to resolve disputes between buyers and sellers. For example, the Canadian Motor Vehicle Arbitration Plan can help consumers resolve problems with vehicle manufacturers.
When you purchase a warranty for a consumer item, consider whether the warranty limits your rights under general law.
Find consumer information about health and environment and food and product safety on the Government of Canada’s website.
Last reviewed: June 2024
Resources
- More FAQs
- Alberta – Consumer, Money & Debt
- Canada – Bankruptcy
- Government of Canada – Consumer Information
- Service Alberta – Fraud and consumer protection