Contract formation requires the following five essential ingredients, namely:
- Offer : The offeror promises the offeree something in exchange for the offeree’s promise to do or not to do something.
- Acceptance: An acceptance of the aforementioned offer.
- Consideration: The consideration is whatever each party brings to the table in the bargained-for exchange.
- No Defenses to Contract Formation: Absence of defenses to contract formation (e.g., Mistake, Lack of Consideration, Lack of Capacity,)
- Absence of Unenforceable Elements: An unenforceable contract is a valid agreement that cannot be enforced in a court due to a defense that is not related to Contract formation (e.g., Statute of Limitations, Statute of Frauds)