Canadian law of contract follows the English common law system. All Canadians can get into contract if they want to. Just because of having some restrictions and some limitations very few people are getting into a contract.

A contract is a settlement between two people, which builds up one or more commitment between two people. They have to give some commitment like what to do or what not to do? The contract can happen between two companies or organizations. For a proper contract the following elements must be included:

  • Legality
  • Mutual agreements
  • Consideration and
  • Capacity

Definition of contract law

Contract law means an agreement between two people establishing mutual commitment mandatory by law. The basic conditions for the agreements are mutual understanding, signified by legal offer, consideration, and legality.

A verbal contract

A verbal agreement is not an agreement. In many circumstances, a simple handshake is a verbal agreement. But if one party doesn’t want the verbal agreement you have to prove both of you agreed on verbal agreements.

Marriage contract in Canada

In Canada, the marriage contract is made before or after marriage. This is a custom made contract by the husband and wife. This contract creates a way of dividing the property. This contract also creates the best way to take care of the children. If both husband and wife get divorced, separate or die they will divide the property to their children's. Marriage contract has this entire rule which is made by both husband and wife legally.

Different types of contract

There are many types of contracts. These contracts depend on various conditions. The different types of contracts are:

  • Fixed price contract
  • Cost-plus contract
  • Time and material contracts
  • Unit pricing contracts
  • Bilateral contract
  • Unilateral contract
  • Implied contract
  • Express contract


A valid contract

To make a contract valid you need to follow some steps. All parties must be agreed upon in a few conditions. You also need to exchange some valuable things such as cash, the documents of the property, or some kind of services, etc. Without this kind of agreement, no contracts will count as a valid contract.

Can anyone write a contract?

Anyone can write a contract without a lawyer. A contract can be simple or complex but it should be agreed between two people or organizations. A contract must be valid and enforceable. Before writing a contract you have to keep in mind some important elements. It should be done between two individuals or two organizations. It should be valid by law. 

Types of contract in business

The business contract is related to 3 categories. These 3 categories are general business contracts, sales-related contracts, and employment contracts. These 3 types of contracts have a variation.

  • Partnership agreement
  • Indemnity agreement
  • Nondisclosure agreement
  • Property and equipment agreement


Contract law has a lot of variation. Most contract law follows many conditions to make the contract valid. If the contract is not valid that contract will not be acceptable by law. If you are planning to create a contract with your partner or if your company wants to create a contract you have to keep in mind the important element which is very important to create a legal contract.