A contract is a legally enforceable exchange of promises. Contract formation requires the following three essential ingredients:

  • Offer: The offeror promises the offeree something in exchange for the offeree’s promise to do or not to do something.

  • Acceptance: The offeree gives the offeror whatever was requested, such as a promise to do or not to do something.

  • Consideration: The consideration is whatever each party brings to the table in the bargained-for exchange.