What is a Contract?

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We enter into contracts in many everyday situations without even realizing it! But what exactly is a contract?

Contract = an agreement!

A contract is formed when two or more people promise to do something for each other. These people are called “contracting parties,” and they can be individuals, a group of people or a company. A contract is formed when there is a “meeting of the minds”, meaning the parties have agreed on what each is supposed to do to respect the contract.

A contact can be verbal

Most contracts don’t have to be in writing: a verbal agreement or an email exchange is enough to form a contract. For example, Nina calls Yousef, who is selling his sofa online. She says she’s willing to pay $150 and that she’ll pick it up tomorrow. A contract has been formed between Nina and Yousef through this simple exchange, and each of them must respect the contract.

However, certain contracts must be in writing, and some contracts must meet other conditions to be valid. For example:

It’s often a good idea to have a written contract even in cases where it’s not required. This will make it easier to prove what was in the contract, should a problem arise.

A contract: the law between the parties

People who enter into a contract have an obligation to do what they promised, and several recourses are possible if one of the parties breaks the contract.

Prohibited clauses

The parties can generally include whatever they want in a contract. However, there are exceptions when one party is in a position to impose the terms of the contract on the other with no real opportunity to negotiate (called an “adhesion contract”), and when a consumer makes a contract with a merchant.

Adhesion contracts and consumer contracts cannot contain the following types of clauses:

  • Clauses that refer to a document you’re not familiar with or you don’t have access to. This might be the case, for example, if the contract contains restrictions that were only explained in a brochure, and you never received the brochure. 
  • Clauses that are illegible because the print is too small
  • Clauses containing vocabulary that a reasonable person in the same situation wouldn’t understand. For example, the use of acronyms that are specific to a field and that aren’t defined in the contract could be considered incomprehensible to a reasonable person.
  • Clauses that intentionally disadvantage a person in an abusive manner. To determine whether a clause is abusive, the circumstances and benefits of the contract for the people involved must be considered.

If a contract contains a prohibited clause, it’s possible to have that clause removed. In certain cases, you must prove that you suffered damages because of this clause, or that the other party didn’t provide the explanations you needed to understand it.

 You can also ask for the entire contract to be cancelled, if removing the clause in question makes the contract useless.