What criteria must be met for a contract to be considered valid?

A contract is deemed valid when it meets certain essential criteria, which includes mutual agreement, consideration, a legal purpose, and legal capacity.

Mutual agreement, often referred to as "offer and acceptance," implies that both parties involved clearly understand and agree to the terms of the contract. Consideration refers to something of value being exchanged between the parties, which is critical in establishing that a contract is not just a mere promise but involves a transaction. The legal purpose ensures that the subject matter of the contract is lawful and does not violate any laws or public policy. Finally, legal capacity means that the parties entering into the contract have the ability to do so, which typically means they are of legal age and have the mental capacity to understand the agreement.

In contrast, the other options propose criteria that do not encompass the fundamental legal requirements for contract validity. For instance, written documentation and notarization are not universal requirements for all contracts, as many contracts can be valid if they are verbal and based on mutual consent. Witness signatures, while they can add an extra layer of verification and may be required for certain types of contracts, do not form a basis for the validity of a contract across the board. Similarly, third-party agreement is not a standard criterion for all