Ontario Mortgage Agent Practice Exam

A valid contract is a legally binding agreement that outlines the terms and conditions of an exchange between parties. While all of the elements listed are important components of a valid contract, only the exchange of consideration is necessary for a contract to be valid. Option B, intention to create a legal relationship, refers to the understanding that both parties must have the intention to enter into a legally binding agreement. This may not always be explicitly stated in a contract, but it is assumed. Option C, the offer, refers to the initial proposal made by one party to another. This offer can be accepted, rejected, or negotiated before a contract is formed. Option D, acceptance of the offer, refers to the agreement or consent to the terms of the offer. Once an offer is accepted, it becomes a binding contract. Therefore, while options B, C, and D are all important aspects of a contract, they are not the only elements required for a contract to be valid. Without the exchange of consideration between parties, a contract cannot be formed.