For employment or independent contracting to exist, a contract must first exist. Contracts only exist if specific human behaviours are evident. For example, if two people are standing in the street talking, they have a human relationship but not a contract. The same two people can create a contract between themselves. No legal person need be present and nothing need be on paper.
For a contract to exist, five key elements must be displayed by the parties:
- An intention to create a legal relationship.
- Clear terms understood by all parties.
- Offer and acceptance.
- Consideration. This is the wide legal idea of payment, which may involve money, bartering or something else!
- Genuine consent by all parties.
If the court finds that any one of these elements is missing, then it will declare that no contract, in fact, exists.