What must be present for a legally binding contract?

For a legally binding contract, consideration from both parties is essential. Consideration refers to something of value that is exchanged between the parties involved in the contract. This can be money, services, or something else that has value. It reflects the mutual agreement and intent to create a binding obligation—each party commits to providing something to the other.

In the context of contract law, without consideration, a promise made by one party is generally not enforceable. This element highlights the importance of both sides participating in the agreement, ensuring that neither party is simply giving something away without receiving anything in return.

The other options do not fulfill the requirements of a binding contract. A written document, while beneficial and often preferred for clarity, is not always necessary for a contract to be enforceable as verbal agreements can also be legally binding if they meet other requirements. A notary signature is not a legal necessity for most contracts, though it can provide an additional layer of authenticity or verification. Lastly, an exchange of gifts does not constitute a contractual agreement since gifts are typically voluntary and lack the consideration that is central to enforceable contracts.