JD Next Practice Exam

A contract must be supported by consideration, which refers to something of value exchanged between the parties involved. This foundational element is essential because it establishes that each party is contributing something—be it money, services, or goods—to the agreement. Consideration is what differentiates a legally binding contract from a mere promise or informal agreement; without it, a contract may not be enforceable in a court of law.

In contrast, the presence of witnesses, formal language, or notarized signatures, while potentially useful or even required in certain contexts, does not inherently serve as the foundational element required for a contract to be valid. Witnesses might add an extra layer of authenticity, and notarization can lend credibility, but neither is universally critical for the contract's existence itself. Likewise, formal language is not a prerequisite for a valid contract, as long as the essential elements—including consideration—are present.