What is one requirement for a contract to be valid?

What is one requirement for a contract to be valid?

• A. Earnest money
• B. Consideration
• C. Be in writing
• D. Bilateral agreement

Answer: (B)

A valid contract must contain consideration, which refers to something of value that is exchanged between the parties involved. Consideration can be in the form of money, services, goods, or a promise to do something. It is essentially the reason both parties enter into the contract; without consideration, a contract cannot be legally binding. This requirement is fundamental in ensuring that both parties have a stake in the agreement and that a legal obligation is established. While contracts can benefit from being in writing, including earnest money, or being a bilateral agreement, these elements do not inherently make a contract valid if consideration is lacking. Therefore, the presence of consideration is a cornerstone of contract validity.

A valid contract must contain consideration, which refers to something of value that is exchanged between the parties involved. Consideration can be in the form of money, services, goods, or a promise to do something. It is essentially the reason both parties enter into the contract; without consideration, a contract cannot be legally binding.

This requirement is fundamental in ensuring that both parties have a stake in the agreement and that a legal obligation is established. While contracts can benefit from being in writing, including earnest money, or being a bilateral agreement, these elements do not inherently make a contract valid if consideration is lacking. Therefore, the presence of consideration is a cornerstone of contract validity.