What two conditions must be met for a contract to be legally binding?

For a contract to be legally binding, it must meet several fundamental conditions, two of which are having a legal purpose and involving competent parties. The requirement for a legal purpose ensures that the agreement does not violate laws or public policy, thereby making it enforceable by law. For example, a contract aimed at engaging in illegal activities would not be binding or recognized by a court.

Competent parties refer to individuals or entities that have the legal capacity to enter into a contract. This includes being of a certain age, typically 18 years or older in most jurisdictions, and possessing the mental ability to understand the terms and implications of the agreement. If either party is deemed incompetent, such as due to mental incapacity or being a minor, the contract may be rendered void or voidable.

While mutual consent and good faith, written form and notarization, and fairness and equity are relevant concepts in contract law, they do not universally qualify all contracts to be legally binding. For instance, not all contracts need to be in written form or notarized to be valid, especially in jurisdictions that allow verbal agreements for certain types of contracts. Thus, ensuring that both a legal purpose and competent parties are present is essential for establishing a legally binding contract.