For a contract to be valid, what must its purpose be?

For a contract to be valid, what must its purpose be?

• A. Financially advantageous for all parties
• B. Legal
• C. Beneficial for only one party
• D. Attractive to potential investors

Answer: (B)

For a contract to be deemed valid, its purpose must be legal. This means that the agreement cannot involve any activities that are against the law or that violate public policy. Contracts formed for illegal purposes, such as drug trafficking or human trafficking, are inherently void and unenforceable in a court of law. The focus on legality ensures that all parties are engaging in actions that uphold societal standards and legal frameworks. This principle is foundational to contract law and underscores the importance of lawful intentions in any binding agreement. While the other options may touch upon certain aspects of contracts—such as being financially advantageous or attractive to investors—they do not address the fundamental requirement that the contract's purpose must conform to legal norms. Thus, a contract can be beneficial for only one party or attractive to potential investors, but if its purpose is illegal, it is not valid regardless of those other attributes.

For a contract to be deemed valid, its purpose must be legal. This means that the agreement cannot involve any activities that are against the law or that violate public policy. Contracts formed for illegal purposes, such as drug trafficking or human trafficking, are inherently void and unenforceable in a court of law.

The focus on legality ensures that all parties are engaging in actions that uphold societal standards and legal frameworks. This principle is foundational to contract law and underscores the importance of lawful intentions in any binding agreement.

While the other options may touch upon certain aspects of contracts—such as being financially advantageous or attractive to investors—they do not address the fundamental requirement that the contract's purpose must conform to legal norms. Thus, a contract can be beneficial for only one party or attractive to potential investors, but if its purpose is illegal, it is not valid regardless of those other attributes.