Which term describes a contract that is binding and enforceable?

• A. Executed contract
• B. Valid contract
• C. Void contract
• D. Voidable contract

Answer: (B)

A valid contract is binding and enforceable because it has all the essential elements that the law requires: an offer, an acceptance, consideration, mutual intent to form a contract, capacity of the parties, and legality of the subject matter. When these elements are present, the agreement is recognized by the courts and can be enforced. Being executed—meaning the terms have been fully performed—doesn’t by itself determine enforceability; it simply indicates completion of duties under a valid agreement. A void contract lacks one of the essential elements or involves illegality, so it isn’t enforceable. A voidable contract is initially valid and enforceable but can be voided by one party due to issues like misrepresentation or duress, so its enforceability can depend on later actions.