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What should a contract have in order to be enforceable?

On Behalf of | Jan 12, 2024 | Business Law |

Contracts are the backbone of any business transaction, laying the foundation for a successful and legally binding agreement. 

As an entrepreneur, it makes all the difference to familiarize yourself with all the essential elements a contract must possess to be enforceable. Incorporating these key components can ensure your agreements stand strong in the eyes of the law.

Mutual assent to set terms 

Mutual assent is a fundamental requirement for a contract’s enforceability. It implies that all parties involved should agree on the same terms and conditions without any coercion or misrepresentation. This helps ensure a clear understanding of each party’s rights and obligations.


Consideration is the exchange of something of value between parties, creating a binding obligation. It could be money, goods, services or even a promise to do or refrain from doing something. Without consideration, a contract may lack the necessary reciprocity to be legally enforceable.

Proper form (written or oral) 

The form of a contract, whether written or oral, is another critical factor influencing its enforceability. While some contracts can be oral, certain agreements, especially those involving real estate or a lengthy duration, must be in writing to be legally binding.

Businesses often encounter situations where oral agreements are made in the heat of negotiations. However, to help ensure enforceability, it is prudent to opt for written contracts whenever possible. This not only provides a tangible record of the agreement but can also strengthen the legal standing of the contract.

Lawful purpose 

A contract’s objective should not violate any laws or public policy. Engaging in illegal activities or creating contracts that go against societal norms can render the agreement null and void.

Crafting a contract that stands the test of legality involves meticulous attention to detail and a thorough understanding of legal principles. If you’re struggling to create a legally binding contract, consider seeking legal counsel to help ensure your agreement can stand strong in the eyes of the law.