Ohio Real Estate Practice Exam

A valid contract is fundamentally built on two essential components: offer and acceptance. The "offer" represents a proposal made by one party to another, indicating a willingness to enter into a contractual agreement under specified terms. This proposal must be clear and definite, outlining the important elements of the intended agreement.

The "acceptance" occurs when the party to whom the offer was made agrees to the terms set forth by the offeror. Acceptance must be communicated effectively and should mirror the terms of the offer for the agreement to be considered valid. This mutual exchange of commitment is what forms the basis of a binding contract.

While terms and conditions, signature and execution, and negotiation and agreement play significant roles in the overall contractual process, they do not encompass the foundational building blocks required for a contract to be deemed valid. Terms and conditions elaborate on the specifics of the agreement, signatures signify consent and acknowledgment, and negotiation involves the discussion phase prior to the formation of a contract, but none of these elements can stand alone as the core criteria for contract validity. Offer and acceptance are what determine whether a legally enforceable contract exists.