A contract is the fundamental building block of all commerce. It is a legally enforceable promise or set of promises. While we often associate contracts with lengthy, jargon-filled documents, an agreement does not need to be in writing to be legally binding (though it is always highly advisable). For a contract to be valid and enforceable in a court of law, it must contain several essential elements. The absence of any one of these elements can render the agreement void.

The first and most crucial element is mutual assent, often referred to as a “meeting of the minds.” This means that both parties have agreed to the same bargain. This is typically demonstrated through a process of offer and acceptance. One party (the offeror) must make a clear and definite offer, and the other party (the offeree) must accept that exact offer without changing its terms. If the offeree tries to change the terms, it is not an acceptance but a counter-offer, which the original offeror is then free to accept or reject.