Test yourself

Fill in the gaps with the words given below.
valid; detriment; inducement; exchange; duress; remedies; acceptance; invalid; counter-offer; binding; promise; promisor; verbal; sane; deemed; breach; agreement; conduct; voidable; expressly; unenforceable; enforceable;

Contracts are an important part of everyday life. Working for an employer; insuring your car or your house and even buying a carton of milk are all governed by the law of contract.
A contract is an (1 p.) between two or more persons (individuals, businesses, organizations or government agencies) to do, or to refrain from doing, a particular thing in (1 p.) for something of value. Contracts generally can be written, using formal or informal terms, or entirely (1 p.) . If one side fails to live up to his/her/its part of the bargain, there's a " (1 p.) " and certain (1 p.) for solving the differences are available. The terms of the contract - the who, what, where, when, and how of the agreement - define the (1 p.) promises of each party to the contract.
The existence of a contract requires finding the following factual elements:

1.  Offer
When you ask someone to do something, or offer to do something for a price, you are making an offer. An offer is the first step in forming a contract. The middle step is the other party's (1 p.) of the deal. The last step is -- where you each live up to your side of the bargain. Words, gestures, or actions can signal an offer and its acceptance will mean entering into a contract. However, if you are forced to make an offer ("your money or life") and enter into the contract under (1 p.) , it is not a (1 p.) offer. Similarly, if you are tricked into accepting, mislead about the terms of the contract, it will not be (1 p.) acceptance of the terms offered but rather will constitute a fraud in the (1 p.) .

2.  Acceptance
There are three types of acceptance:
Express: a direct agreement, when you say: "I accept your offer."
Implied: usually by (1 p.) , i.e. when the party behaves in such a way which indicates that they agreed to a proposed bargain/offer.
Conditional: (or qualified) acceptance when the offeree proposes some changes to the original offer, i.e. makes a (1 p.) which now must be accepted by the original offeror for a contract to be made.

3.  Consideration (which can be a promise or payment in some form)
Consideration is a necessary element of a valid contract. For a promise to be (1 p.) as a contract something (some consideration) must be given in exchange for that promise. In other words, the (1 p.) should receive some advantage or benefit or, alternatively, the (1 p.) must suffer some (1 p.) . The general rule in English contract law is that without consideration a contract shall be deemed (1 p.) or, to be more precise, there will be no contract concluded at all.

4.  Intention to be legally bound
There is a presumption for commercial agreements that parties intend to be legally bound (unless the parties (1 p.) state that they do not want to be bound). On the other hand, many kinds of domestic and social agreements are (1 p.) on the basis of public policy, for instance between children and parents.

5.  Capacity to contract
A person entering into a contract must be of legal age, (1 p.) and not a convict or enemy alien, otherwise the contract is (1 p.) .

To remember the elements of contract, learn the acronym CIAO! made of the first letters of the five elements of contract, where C is for consideration/capacity to contract, I is for intention, A is for acceptance, and O is for offer.