Under California Civil Code §1550, which of the following is an essential element required to form a valid contract?
Correct Answer
B) The parties must have legal capacity to enter into the agreement
California Civil Code §1550 identifies four essential elements of a valid contract: (1) parties capable of contracting, (2) their mutual consent, (3) a lawful object, and (4) sufficient consideration. Legal capacity — meaning the parties must be of legal age and sound mind — is one of those four required elements. Without it, a contract is voidable or void.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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