What constitutes a "valid contract" in real estate?

A valid contract in real estate requires that the agreement involves competent parties and lawful subject matter. Competent parties refers to individuals who have the legal capacity to enter into a contract, meaning they are of legal age and mentally capable. Lawful subject matter underscores that the contract's purpose must be legal and not violate any laws, which is crucial for the enforceability of the contract.

The requirement for competent parties ensures that all parties involved can understand the terms and conditions and are able to fulfill their obligations. Additionally, the legality of the subject matter protects against contracts that might involve illegal activities or terms.

Understanding this framework is essential in real estate transactions, ensuring that all agreements made between parties are not only enforceable but also uphold public policy and legal standards.