What constitutes a contract?

A legally binding agreement between two or more parties is the essence of a contract. For a contract to be valid, it typically requires several key elements: offer and acceptance, consideration (something of value exchanged), mutual consent, capacity to enter into the agreement, and a lawful object. When these elements are met, the agreement is recognized by law, allowing parties to enforce their rights and obligations in a court if necessary.

Other choices do not meet the criteria to be considered a contract. A verbal agreement, while it can be binding in some situations, may lack the necessary elements or clarity for enforceability, making it less secure than a written contract. A promise made by only one party does not represent a contract because there is no reciprocal obligation, which is essential for binding agreements. Lastly, informal agreements that can be easily broken typically do not have the necessary elements of enforceability and hence do not qualify as contracts. Thus, the definition that encompasses the legal framework and enforceability is a legally binding agreement between two or more parties.