1. An offer by one person;

2. An acceptance of that offer by the other;

3. Mutual agreement to the terms of the contract... that means both parties agree on what is promised;

4. An exchange of consideration... something of value is given for something else of value. 

Be aware that if a contract involves something illegal or against public policy, even if all the elements listed above are present, it is not legally binding. The prepared documents that you buy or those that are included in learning courses will usually comply with contract law. Although it's a good idea to identify each of the four requirements in any contract you sign.

Where you really must understand how to create a valid contract is on those rare occasions when the other party is very motivated and you must have something for them to sign right now.

That's when you can take any piece of paper and write a contract following the four requirements. Later you can ask the other party to sign a more formal contract if you feel it's necessary. Don't let a super deal slip through your fingers just because you don't know the basics of a contract.

1. Offer

2. Acceptance

3. Agreement

4. Compensation

Just remember... "O" double "A" and "C".

* This series was written by an investor and not an attorney. Nothing here should be considered legal advice. If you have a question about any contract ask an attorney BEFORE SIGNING!

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