Which of the following is required for a valid contract to be formed?

Answer options:

A written document signed by both parties.

Fair market value consideration.

Performance by at least one party.

Consideration.

How to approach this question

Elements of Contract: Offer, Acceptance, Consideration, Capacity, Legality. Writing is only needed for some.

Full Answer

D.Consideration.✓ Correct

Consideration (bargained-for exchange) is a necessary element of a valid contract. A writing is only required for contracts falling under the Statute of Frauds.

Common mistakes

Thinking all contracts must be written.

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Practice the full CPA REG Practice Exam 4

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