What is a binding contract?

A binding contract has the essential elements of a contract but requires capacity and legal purpose. The essential elements of a binding contract are mutuality of obligation (comprised of offer and acceptance), definite terms, and consideration. In addition to these basic elements of a contract, the parties must have the capacity to participate and the purpose of the contract must be lawful. Otherwise, the contract may not be binding. Learn more about binding contracts in our free legal guide below.

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UPDATED: Jul 14, 2021

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