Valid Contract Elements
~12 min read · Test offers for mutual assent, consideration, capacity and lawful object — void vs voidable.
A contract exists only when its elements do: mutual assent, consideration, capacity, lawful object — and for real estate, a writing. The exam's real game is the status ladder: valid, void, voidable, unenforceable — four words that decide every scenario.
The essential elements
Mutual assent (offer + acceptance): a definite offer accepted exactly as made — any change is a counteroffer that kills the original; acceptance must be communicated before the offer dies (revocation any time before acceptance, lapse, rejection). Consideration: something of legal value exchanged — money, promises; adequacy is the parties' business. Capacity: legal age and sound mind — minors' contracts are voidable BY THE MINOR; adjudicated incompetents' are void. Lawful object: illegal purposes void the deal. Real-estate sales add the statute of frauds: contracts for the sale of land must be in writing and signed to be enforceable (leases for a year or less are the classic exception).
- Offer + mirror-image acceptance, communicated
- Counteroffer = rejection + new offer
- Consideration exchanged; courts don't weigh adequacy
- Minors: voidable by the minor; illegality: void
- Land contracts: written and signed (statute of frauds)
The status ladder
Valid: all elements present, enforceable by both sides. Void: no contract at all — missing element, illegal object, adjudicated incapacity. Voidable: binds one party while the other may rescind — minority, fraud, misrepresentation, duress, undue influence; the protected party chooses to cancel or perform. Unenforceable: looks valid but courts won't enforce it — unsigned land contracts under the statute of frauds, claims past the statute of limitations.
- Valid: enforceable both ways
- Void: never existed legally
- Voidable: victim's option to rescind or affirm
- Unenforceable: real agreement, no judicial remedy
Executed, executory, and construction
A contract is executory while performance remains (a signed purchase agreement awaiting closing), executed when fully performed. Bilateral contracts trade promise for promise (purchase agreements); unilateral trade promise for performance (an open listing: commission only if you produce the buyer). Express vs implied describes formation by words vs conduct.
Worked example
Seller offers to sell at $400,000. Buyer replies, 'Accepted — if you leave the washer and dryer.' The seller says nothing and that evening sells to a neighbor. The next day the buyer 'accepts the original $400,000 with no conditions' and sues. Separately, a 17-year-old signed a contract to buy a condo last month and now wants out. Results?
The buyer's 'acceptance-if' added terms — a counteroffer, which REJECTED and extinguished the $400,000 offer; there was nothing left to accept the next day, and the seller (who never accepted the counter) was free to sell to the neighbor. No contract, no lawsuit. The 17-year-old: capacity makes the condo contract voidable at the minor's election — she may disaffirm and recover her deposit; the adult seller has no reciprocal escape (voidable protects only the incapacitated side). Two scenarios, two ladder rungs: no-contract-formed versus contract-formed-but-voidable — the distinction the exam builds entire question sets on.
Common exam pitfalls
Treating a modified acceptance as acceptance.
Mirror-image rule: any change is a counteroffer that kills the original offer forever.
Calling minors' contracts void.
Voidable — the minor may enforce OR escape; only the minor holds the option.
Confusing void with unenforceable.
Void = no contract ever. Unenforceable = genuine agreement the courts won't enforce (e.g., oral land sale).
Assent, consideration, capacity, legality — in writing for land; and remember: counter kills, minors choose, illegality voids.
Recap
- Elements: mutual assent, consideration, capacity, lawful object
- Statute of frauds: land contracts written and signed
- Counteroffer rejects and replaces the original
- Revocation allowed any time before acceptance
- Valid / void / voidable / unenforceable — learn the ladder
- Executory until closing; bilateral promise-for-promise
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