A valid contract needs six elements: offer, acceptance, consideration, capacity, legality, and mutual assent. Here's what each means and what happens when one is missing.
Not every promise is enforceable. For an agreement to be a valid, binding contract, it generally needs six essential elements. Leave one out and you may have nothing a court will enforce.
One party proposes clear, definite terms that show a willingness to be bound.
The other party agrees to those exact terms. A change to the terms is a counteroffer, not acceptance.
Each side gives something of value: money, goods, services, or a promise. Consideration is what separates a contract from a gift.
The parties must be legally able to contract. Minors and people lacking mental capacity may not be bound.
The contract's purpose must be lawful. An agreement to do something illegal is void.
Both parties must genuinely understand and agree to the same terms, a true "meeting of the minds" free from fraud, duress, or mistake.
Depending on which element fails, the agreement may be void (no legal effect), voidable (one party can cancel), or unenforceable (valid but a court won't enforce it). A deal lacking consideration usually isn't a contract at all, while one signed under duress is typically voidable.
These elements are the foundation beneath every category of agreement. To see how they apply across bilateral, unilateral, executory, and other forms, read our guide to types of contracts.
What are the most important elements of a contract?
Offer, acceptance, and consideration are often called the core three, but capacity, legality, and mutual assent are equally necessary for enforceability.
Does a contract need to be signed to be valid?
Not always. Many oral and unsigned contracts are valid, though certain agreements must be in writing under the Statute of Frauds. A signature is strong evidence of assent but isn't always strictly required.