Essential Elements of Contract Formation
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.