The basis for concluding a legal transaction or contract is a declaration of intent, which is rooted in the autonomy of the parties. A legal transaction is formed when the declaration of intent is effective and free of defects. Therefore, the parties must reach an agreement on the essential elements of the legal transaction.

A declaration of intent must be:

• Free (not made under threat from the other party or a third party),
• Serious (not made as a joke),
• Free of defects (not made as a result of mistake or fraud).

The intent to conclude a contract can be expressed through words, customary signs, or other actions that reliably indicate its existence (e.g., nodding, making a payment).¹⁰⁹