Four Essential Elements Are Necessary to Create a Valid Contract

question 38

Multiple Choice

Four essential elements are necessary to create a valid contract. Which of the following is not one of these elements?

• A) Something of value must be given by each party.
• B) The offeror and offeree must reach agreement.
• C) The parties have the capacity to contract.
• D) The agreement must be in writing.

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Definitions:

Bonds Outstanding

Bonds outstanding are the total amount of bonds issued by a company that are not yet redeemed and are currently held by investors.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, engaged in commercial, industrial, or professional activities.

Sweetener

An additional enticement or incentive provided to make an offer or deal more attractive, often seen in financial agreements.

Private Placements

Loans, usually long term in nature, provided directly by a limited number of investors.