What makes a contract legally binding

A contract doesn't need to be a formal document with signatures and legal language to be enforceable. Courts generally look for the same handful of elements, whether the agreement is a one-page form or a text exchange.

Offer and acceptance

One party proposes specific terms, and the other clearly agrees to them. Vague back-and-forth negotiation, without a clear final agreement, generally isn't enough on its own.

Consideration

Each side must give something of value — money, a service, a promise to do or not do something. A one-sided promise with nothing given in return (a gift, for instance) generally isn't a contract in the legal sense.

Capacity and legality

Both parties need the legal capacity to enter an agreement (generally, being an adult of sound mind), and the subject of the contract has to be legal — a court won't enforce an agreement to do something illegal.

Written vs. verbal

Many verbal agreements are enforceable, but certain categories — real estate sales, agreements that can't be completed within a year, and others depending on jurisdiction — generally must be in writing under a rule known as the statute of frauds.

Why written contracts are still worth it

Even where a verbal agreement would be legally sufficient, a written contract is dramatically easier to prove and enforce, since it removes the dispute over what was actually agreed to in the first place.