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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.

UPDATED: Jul 18, 2023Fact Checked

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Nationwide State Farm Allstate

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 contract are mutuality of obligation (comprised of offer and acceptance), definite terms, and consideration. If the contract is lacking in capacity and legal purpose, then the contract may not be binding. [toc] What are the basic elements of a contract? The basic el...

Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

UPDATED: Jul 18, 2023

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

UPDATED: Jul 18, 2023

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

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