Introductory Business Law CLEP Prep Practice Exam

What is required in order for a contract to be enforced in court?

1. A valid offer must be accepted

2. An agreement must be reached

3. The terms of the contract must be certain

4. Legal capacity of both parties

The correct answer is: Legal capacity of both parties

In order for a contract to be legally enforceable, it must meet certain requirements. While all of the options listed are important aspects of a contract, the most crucial factor is the legal capacity of both parties. This means that both parties must have the mental capacity to understand and enter into a contract. If one or both parties lack this capacity (e.g. due to being a minor or suffering from a mental illness), the contract may be considered void and unenforceable in court. Therefore, having a valid offer, reaching an agreement, and having certain terms are all important, but without the legal capacity of both parties, the contract would not hold up in court.