Click/tap each label to learn more.
1. Offer
6. Proper Form
5. Legal Purpose
2. Acceptance
ValidContract
3. Consideration
4. CompetentParties
Consideration
DEFINITION
Each party gives something of value in return
EXAMPLE
The business gives payment; the designer provides creative work.
WHY IT MATTERS
A contract must involve an exchange.A one-sided promise isn’t enforceable.
Legal Purpose
DEFINITION
The contract must be about something allowedunder the law.
EXAMPLE
A contract to provide logo design is allowed;one to produce counterfeit products isn’t.
WHY IT MATTERS
Courts will not enforce deals involving bannedor harmful activity.
Acceptance
DEFINITION
The other party agrees to the exact terms of the offer.
EXAMPLE
The designer replies, “I accept your offer and will deliver the logo by the 15th.”
WHY IT MATTERS
Contracts only form when both parties are on thesame page—no assumptions.
Offer
DEFINITION
One party clearly proposes the terms of a deal.
EXAMPLE
A business emails a freelance designer offering $1,000 to create a new company logo.
WHY IT MATTERS
Without a clear offer, there’s no starting pointfor a contract.
Proper Form
DEFINITION
Some contracts must be in writing to be valid, especially in business.
EXAMPLE
A signed service agreement between two companies for a year-long project.
WHY IT MATTERS
If a contract is legally required to be written andit’s not, it may be invalid—even if all other partsare present.
Competent Parties
DEFINITION
Everyone involved must be legally able to enter a contract.
EXAMPLE
Both the business owner and the designer are adults and mentally sound.
WHY IT MATTERS
Contracts made with minors or people under duress may not hold up in court.
Six Elements of a Valid Contract
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Created on September 16, 2025
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Transcript
Click/tap each label to learn more.
1. Offer
6. Proper Form
5. Legal Purpose
2. Acceptance
ValidContract
3. Consideration
4. CompetentParties
Consideration
DEFINITION
Each party gives something of value in return
EXAMPLE
The business gives payment; the designer provides creative work.
WHY IT MATTERS
A contract must involve an exchange.A one-sided promise isn’t enforceable.
Legal Purpose
DEFINITION
The contract must be about something allowedunder the law.
EXAMPLE
A contract to provide logo design is allowed;one to produce counterfeit products isn’t.
WHY IT MATTERS
Courts will not enforce deals involving bannedor harmful activity.
Acceptance
DEFINITION
The other party agrees to the exact terms of the offer.
EXAMPLE
The designer replies, “I accept your offer and will deliver the logo by the 15th.”
WHY IT MATTERS
Contracts only form when both parties are on thesame page—no assumptions.
Offer
DEFINITION
One party clearly proposes the terms of a deal.
EXAMPLE
A business emails a freelance designer offering $1,000 to create a new company logo.
WHY IT MATTERS
Without a clear offer, there’s no starting pointfor a contract.
Proper Form
DEFINITION
Some contracts must be in writing to be valid, especially in business.
EXAMPLE
A signed service agreement between two companies for a year-long project.
WHY IT MATTERS
If a contract is legally required to be written andit’s not, it may be invalid—even if all other partsare present.
Competent Parties
DEFINITION
Everyone involved must be legally able to enter a contract.
EXAMPLE
Both the business owner and the designer are adults and mentally sound.
WHY IT MATTERS
Contracts made with minors or people under duress may not hold up in court.