Short answer
A contract must contain an offer, acceptance, consideration, capacity, legality, and mutual assent.
Key points
- Offer: clear proposal communicated to the other party
- Acceptance: agreement to the exact terms
- Consideration: something of value exchanged
- Capacity: parties must be competent and of legal age
- Legality & mutual assent: lawful purpose and genuine agreement
A valid contract requires six core elements: an offer, acceptance, consideration, capacity, legality, and mutual assent.
Offer and acceptance
The offer is a specific proposal presented by one party. Acceptance occurs when the other party agrees to those exact terms; any change is a counter‑offer.
Consideration and capacity
Consideration means each side gives something of value—money, services, or a promise. Both parties must have legal capacity, meaning they are of sound mind, legal age, and not impaired.
Legality and mutual assent
The contract’s purpose must be lawful; agreements to break the law are unenforceable. Mutual assent ensures all parties understand and voluntarily agree to the terms, free from coercion or deception.
Frequently asked questions
Can a contract be enforced without consideration?
Generally no; without consideration the agreement is treated as a gift and lacks the legal obligation needed for enforcement.
What happens if one party lacks capacity?
A contract with a minor or someone who is mentally incapacitated is usually voidable, meaning the disadvantaged party can cancel it.
Is a verbal agreement a valid contract?
A verbal agreement can be enforceable if it meets all six elements, though proving its terms may be more difficult than with a written contract.
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