[ITEX CORPORATION LETTERHEAD]              Exhibit 5.1





                                  May 20, 1998

ITEX Corporation
One Lincoln Center
10300 S.W. Greenburg Road, Suite 370
Portland, OR 97223

Ladies and Gentlemen:

         In the position of employed General Counsel, I have acted as counsel to
ITEX  Corporation,  a Nevada  corporation (the "Company") in connection with the
filing of a  Registration  Statement on Form S-8 to be filed by the Company with
the Securities and Exchange Commission (the "Registration  Statement")  relating
to 2,970,000  shares of Common Stock  issuable  pursuant to the Company's  1996,
1997 and  1998 Key  Employees'  Incentive  Stock  Option  Plans  adopted  by the
Company's  Board of  Directors  on  December  15,  1995,  December  27, 1996 and
September 3, 1997, respectively, and approved by the Shareholders of the Company
on May 3,  1996  with  respect  to the 1996  Plan and on  February  6, 1998 with
respect to the 1997 and 1998 Plans (the "1996 Plan", "1997 Plan" and "1998 Plan"
respectively).

         In connection with the foregoing, I have examined,  among other things,
the Plan and originals or copies,  satisfactory to me, of all corporate  records
and of all agreements, certificates and other documents as I deemed relevant and
necessary as a basis for the opinion hereinafter expressed. In such examination,
I have assumed as genuine all  signatures,  the legal capacity of all individual
signatories,  the authenticity of all documents submitted to me as originals and
the  conformity  with the original  documents  of  documents  submitted to me as
copies or facsimiles  thereof. As to any facts material to such opinion, I have,
to the extent that  relevant  facts were not  independently  established  by me,
relied  on  certificates  of  public  officials  and  certificates,   oaths  and
declarations of officers or other representatives of the Company. I have assumed
that the certificates  representing the shares issued pursuant to each Plan will
each be duly executed and delivered in accordance with applicable law.

         Based upon the foregoing,  I am of the opinion that the shares,  if and
when issued in accordance with each Plan, will be legally issued, fully paid and
non-assessable.

         I hereby  consent to the filing of a copy of this opinion as an exhibit
to the Registration Statement.

Sincerely,


/s/DONOVAN C. SNYDER
DONOVAN C. SNYDER
Attorney at Law