 Hello, this is Waylon Chow and welcome to this series of videos on forming contracts. We will examine from a legal perspective, specifically a Canadian common law perspective, how contracts are formed. The first video will introduce you and provide an overview about contracts and then the following videos will each concentrate on a particular requirement for forming a contract. The first requirement being having an agreement that is formed with an offer and an acceptance. The second requirement is an intention to form legal relations and the third and final requirement is an exchange of consideration between the parties. What exactly is a contract? It is much more than just having an agreement. We make agreements with people in our lives all the time but not all of those agreements are considered to be legally binding contracts. A contract specifically is an agreement that is considered to be legally enforceable which means that if one party fails to live up to their obligations under an agreement the other party can sue them in court to have the court enforce the agreement. Most of the economic transactions we enter into in our lives can be considered to be legally binding contracts, buying or selling a house, buying our morning coffee, enrolling in college, buying a train ticket, purchasing something online, buying groceries at the grocery store, entering into a phone contract or buying or selling a business. They all involve a contract where there are legally binding obligations imposed on each of the parties involved in each transaction. Before we start delving into some of the legal aspects about forming contracts, I first wanted to dispel some common myths about contracts. The first myth is that if there is nothing in writing there is no contract and that is a myth, that is not true. There is no general requirement that a contract be in writing. A written contract having it in writing is usually a good idea because it provides an easy way to prove that a contract was formed and also to prove the exact terms of a contract. That does not mean that you need a written contract to have a valid contract. A contract can be formed verbally without anything in writing. There are some exceptions to that rule however. There are some specific types of contracts that have to be in writing in order to be enforceable. The most notable type is any kind of contract involving the sale of real estate has to be in writing. The other myth is that if you don't like a contract you can just tear it up. Just tearing it up might make you feel better but from a legal perspective it doesn't do anything. It does not eliminate the contract. It does not get rid of the legal obligations that arise from a contract. A contract can be terminated by either mutual agreement between all the parties involved in the contract or if there is a termination clause in the contract that can be applied to have the contract terminated but just the physical tearing up of a contract does not eliminate the legal existence of a contract. Where does contract law come from or what are the sources of contract law? Most of contract law comes from case law or we also refer to that as common law. These are legal court decisions from which we extract various legal principles that have become the law of contract. That's where most of contract law comes from which is common law. These videos are based on Canadian case law or Canadian common law. Common legislation can also override general contract law or common law. For example, the general rule is that contracts are not required to be in writing. As I mentioned in the previous slide, there are certain types of contracts that have to be in writing and this is required by a statute called the Statute of Frauds and there's also another statute that requires certain consumer contracts to be in writing and that statute is called the Consumer Protection Act. So both of those pieces of government legislation serve to override or modify general contract law which arises from common law. Based on common law, there are three essential elements to form a contract. The first element is having an agreement. The second is an intention to create legal relations and the third essential element is an exchange of consideration between the parties. The next videos in this series will examine each of these three elements in detail.