3. Intention of legal consequences:
A contract requires that the parties intend to enter into a legally binding agreement. That is, the parties entering into the contract must intend to create legal relations and must understand that the agreement can be enforced by law.
The intention to create legal relations is presumed, so the contract doesn't have to expressly state that you understand and intend legal consequences to follow.
If the parties to a contract decide not to be legally bound, this must be clearly stated in the contract for it not to be legally enforceable.