We all make binding contracts as part of our daily lives and you may be wondering what the effect of a binding contract is and if you can get out of it..... Consumers have a lot more protection from unfair terms and in particular if you conclude a contract "at a distance", so online, you usually have a cooling off period to simply change your mind with no penalty. Some goods and services are exempt (e.g. perishable goods, holidays on particular dates, etc). It is a huge topic so the following is a general overview..... A contract is legally binding when five core elements are present. 1. Offer A clear and definite promise to be bound on specific terms, capable of acceptance. It must be distinguished from an invitation to treat, such as goods displayed in a shop window. 2. Acceptance An unqualified agreement to the exact terms of the offer. It must mirror the offer and be communicated. A counter-offer destroys the original offer. 3.Consideration Each party must provide something of value. It does not have to be adequate, but it must be sufficient in law. Past consideration will not usually suffice. 4.Intention to create legal relations In commercial agreements there is a strong presumption of legal intention. The parties should agree that the contract can be subject to legal action if one or the other breaches the terms....an example is bidding on an auction site - when you place a bid, you agree to enter in to a binding agreement if you win Certainty of terms The agreement must be sufficiently clear and complete. If essential terms are vague or incomplete, the contract may fail. Capacity and legality The parties must have legal capacity, and the contract’s subject matter must be lawful. Everyone is presumed to retain mental capacity until a medical expert can say otherwise....an example is a Will and the person who makes the will must have mental capacity, if not then the will can be considered void. Similarly, the agreement must be legal - so if the transaction is illegal (e.g. someone buying drugs or illegal weapons) then you have no recourse if it goes wrong.