A legally enforceable contract requires five elements: an offer, acceptance, consideration, contractual capacity, and a legal purpose. Miss any one of them and the agreement generally falls apart in court. Some contracts must also be in writing to be enforced, and even an agreement that satisfies every element can be undone by defenses that attack how consent was given.
Offer
Every contract starts with an offer: one party proposes a deal with genuine intent to be bound if the other side agrees. A casual remark like “I’d probably pay $100 for that” doesn’t qualify, because it signals willingness to negotiate rather than a firm commitment. Courts read the offer the way a reasonable person would understand it in context, not the way the speaker privately meant it.
The terms have to be definite enough that a court could figure out what was agreed to. At minimum that means the subject matter, the quantity, the price (or a way to calculate it), and who the parties are. An offer to sell “some goods at a fair price” fails because nobody can tell what was actually promised. The offer also has to reach the person it’s directed to; something written down but never communicated creates no legal power.
Offers don’t stay open indefinitely. The offeror can revoke before acceptance as long as the revocation is actually communicated. A rejection or counteroffer kills the original offer. If the offer sets a deadline, it expires then; otherwise it lapses after a reasonable time. Death or incapacity of the offeror usually ends the offer automatically. The main exception is an option contract, where the offeree pays something to keep the offer open for a set period and locks the offeror in.
Acceptance
Acceptance is the offeree’s unconditional agreement to the offer’s terms. Under the common law mirror image rule, acceptance has to match the offer exactly. Change any term and the response becomes a counteroffer, which rejects the original and puts a new one on the table.1Cornell Law School Legal Information Institute. Mirror Image Rule
Acceptance can be express — saying “I accept,” signing a document, shaking hands — or implied through conduct, like starting the work the offer describes. Silence almost never counts. A business can’t ship you a product and claim you agreed to buy it because you didn’t respond.
Sales of Goods Work Differently
The mirror image rule loosens considerably for contracts involving the sale of goods. Under UCC § 2-207, a clear expression of acceptance creates a binding contract even if it includes terms that differ from the offer, as long as the acceptance isn’t explicitly conditioned on the offeror agreeing to those new terms.2LII / Legal Information Institute. UCC 2-207 Additional Terms in Acceptance or Confirmation Between merchants, the additional terms become part of the contract unless they materially change the deal, the offer limited acceptance to its exact terms, or the offeror objects within a reasonable time. The rule exists because businesses swapping purchase orders and invoices almost always have different boilerplate, and demanding a perfect match would stop commerce cold.
When Acceptance Takes Effect
When acceptance is sent by mail or another non-instantaneous method, the mailbox rule says it takes effect the moment it’s properly dispatched, not when the offeror receives it. Drop an acceptance letter in the mailbox Monday, the offeror reads it Wednesday, and the contract was formed Monday. Rejections and revocations work the opposite way and only take effect on arrival. The mailbox rule doesn’t apply if the offeror specified a particular method the offeree ignored, and it doesn’t apply to option contracts, where acceptance has to actually be received.
Consideration
Consideration is what separates a contract from an empty promise. Each side has to give up something of value or take on an obligation in exchange for what the other side provides. That exchange is the deal, and without it a court won’t enforce the agreement.
The “something of value” doesn’t have to be money. It can be a promise to do something, a promise to refrain from doing something you’re otherwise entitled to do (forbearance), goods, services, or giving up a legal right. Promise to build someone a deck in exchange for their promise to pay you $2,000, and each promise is consideration for the other.
Courts don’t police whether the deal was a good one. Selling a $15,000 car for $500 still involves valid consideration, because both sides bargained for something. What matters is that the exchange was actually bargained for. A gift doesn’t count, however generous, because nothing was given in return.
What Doesn’t Count
Two situations trip people up. The first is past consideration: something already done before any agreement existed can’t serve as your side of a new bargain. Your neighbor mows your lawn uninvited, you later promise them $50 for it, and that promise is unenforceable because the mowing wasn’t exchanged for the payment.3Legal Information Institute. Consideration
The second is the pre-existing duty rule. Promising to do something you’re already legally obligated to do isn’t new consideration. A contractor under contract to build your kitchen for $20,000 can’t demand an extra $5,000 to finish the same work and treat it as a new deal, because no new obligation was taken on. The UCC carves out an exception for sales of goods, where good-faith modifications can be enforceable without new consideration.
Promissory Estoppel
A promise that lacks formal consideration can sometimes still be enforced if the person who received it relied on it to their detriment. Under promissory estoppel, a clear promise, reasonable reliance, and injustice avoidable only by enforcement can carry the day. The classic example: an employer promises an employee a pension, the employee retires in reliance on it, and the employer backs out. A court may enforce the promise even without new consideration from the employee. Courts treat this as a backup rather than a first option, and the remedy may be limited to what fairness requires.
Contractual Capacity
Even with a solid offer, acceptance, and consideration, every party needs the legal ability to enter the contract. The law shields certain groups from being bound to agreements they may not fully understand.
Minors
In nearly all states, anyone under 18 lacks full contractual capacity. A minor can enter a contract, but it’s voidable at the minor’s discretion. The minor can walk away for any reason or no reason, either before turning 18 or within a reasonable time afterward, and the adult on the other side is stuck. The adult remains bound the whole time.
One significant exception covers contracts for necessities like food, shelter, clothing, and medical care. A minor who disaffirms a contract for necessities can still be held responsible for their reasonable value. Otherwise, no one would rent an apartment or sell groceries to a minor, and the protection would end up hurting the people it’s meant to help.
Mental Incapacity and Intoxication
Someone who can’t understand the nature and consequences of an agreement lacks the mental capacity to contract. If a court has already declared the person incompetent, their contracts are void. If they haven’t been formally declared incompetent but lacked understanding at the time, the contracts are voidable.
Intoxication can also undermine capacity if the person was so impaired they didn’t understand what they were agreeing to. These contracts are voidable, but courts are less sympathetic than they are with minors or mental illness, because the impairment was self-inflicted. If the other party could plainly see the intoxication and pushed the deal through anyway, a court is more willing to let the intoxicated person out.
Legal Purpose
A contract has to involve a lawful objective. An agreement to do something illegal — a drug transaction, a prohibited gambling arrangement, a contract to commit fraud — is void from the start and gives neither party enforceable rights. Courts treat these as if they never existed.
Contracts can also be unenforceable for violating public policy even when no specific law prohibits the activity. Overly broad non-compete agreements are a common example. Enforceability varies widely by jurisdiction, and courts frequently strike down or narrow non-competes that are unreasonable in scope, geography, or duration. As of 2026, there is no federal ban on non-compete clauses; the FTC’s 2024 attempt at a blanket prohibition was blocked by a federal court, and the agency abandoned its appeal in September 2025.
Unconscionability
Even when the subject matter is perfectly legal, a court can refuse to enforce a contract or a specific clause that is unconscionable, meaning so one-sided that enforcement would be fundamentally unfair.4LII / Legal Information Institute. UCC 2-302 Unconscionable Contract or Clause Courts generally look for both procedural unconscionability (an unfair bargaining process, hidden terms, vastly unequal bargaining power) and substantive unconscionability (terms that are shockingly one-sided). When a court finds a clause unconscionable, it can void that clause alone and leave the rest intact.
When the Contract Also Has to Be in Writing
Most people assume every contract has to be written down. Oral contracts are actually enforceable for most everyday transactions. But certain categories must be evidenced by a writing signed by the party you’re trying to hold to the deal. This requirement, the statute of frauds, exists because some agreements are important enough that courts don’t want to sort through competing memories of what was said.
The following types of contracts generally must be in writing:
- Contracts involving land, including any agreement to sell, mortgage, or lease real property. Land is read broadly to cover buildings and anything permanently attached to the ground.
- Contracts that by their terms can’t possibly be performed within one year of being made. A two-year employment contract qualifies; a contract to build a shed that might take 14 months but could conceivably be done sooner does not.
- Promises to pay someone else’s debt if that person defaults.
- Promises by an estate executor to pay a debt of the deceased out of the executor’s own pocket.
- Agreements made in consideration of marriage, including prenuptial agreements.
- Sales of goods priced at $500 or more. Under UCC § 2-201, the writing has to indicate a deal was made and show the quantity.5LII / Legal Information Institute. UCC 2-201 Formal Requirements Statute of Frauds
The writing doesn’t have to be a formal contract. A signed letter, email, or even a text message can satisfy the requirement if it identifies the parties, describes the subject matter, and is signed or otherwise authenticated by the person being held to the deal. Without some written evidence, a court will generally refuse to enforce the agreement, even if both parties admit it existed.
Defenses That Can Still Undo a Contract
A contract can check every box — offer, acceptance, consideration, capacity, legal purpose, and a writing where required — and still be unenforceable if one party’s consent was compromised. These defenses attack the quality of the agreement itself.
Duress
A contract signed under duress is voidable by the victim. Duress exists when agreement was induced by an improper threat that left no reasonable alternative but to sign. Physical threats are the obvious case, but economic duress counts too. A supplier who threatens to breach an existing contract at a critical moment, knowing the other side will suffer devastating losses without an immediate replacement, may find any agreement extracted under that pressure treated as voidable.
Misrepresentation
When one party makes a false statement of fact that induces the other to enter the contract, the deceived party can void the agreement. Fraudulent misrepresentation requires that the person making the statement knew it was false (or recklessly disregarded the truth) and intended the other party to rely on it. Even an honest misrepresentation can make a contract voidable if it concerns a material fact the other party reasonably relied on. Opinions and sales puffery like “this is the best car on the market” don’t count. Specific factual claims like “this car gets 35 miles per gallon” do.
Undue Influence
Undue influence arises when someone in a position of trust or authority uses that relationship to pressure another person into a contract. An elderly parent persuaded by a caretaker to sign over property, or a lawyer steering a client into a deal that benefits the lawyer, are typical examples. The relationship doesn’t have to be formal; courts look at whether one party had dominant influence and exploited it.
Mistake
A mutual mistake about a fact central to the agreement can make a contract voidable. If both buyer and seller genuinely believe a painting is by a famous artist when it’s actually a copy, a court may allow rescission because both sides were wrong about something fundamental. Unilateral mistakes, where only one side is wrong, rarely justify voiding a contract unless the other party knew about the mistake or caused it through fraud.
Void vs. Voidable
The difference between “void” and “voidable” has real consequences for what you can actually do. A void contract is treated as if it never existed. No one can enforce it, no one can ratify it, and a court won’t help either party. Contracts for illegal purposes are the clearest example.
A voidable contract is valid and enforceable until the protected party decides to cancel it. A minor who signs can either honor the deal or walk away. Until that choice is made, the contract stands. The same goes for contracts obtained through duress or misrepresentation: they remain in force unless and until the victim acts to void them. A victim who does nothing and continues performing may lose the right to cancel through ratification.