What must every party of a contract be in order to be valid?

For a contract to be considered valid, all parties involved must be competent. Competence refers to the legal ability of individuals to enter into a binding contract. This includes being of legal age (usually 18 years or older), having the mental capacity to understand the nature and consequences of the agreement, and not being under duress, fraud, or undue influence.

Being competent ensures that parties can comprehend the terms of the contract and the obligations they are taking on. This is foundational to the enforceability of the contract; if one of the parties lacks competence, the contract may be voidable, meaning it can be invalidated by the party who was not competent.

While being wealthy, trustworthy, or informed may be advantageous traits in a contractual relationship, they do not affect the legal validity of the contract in the same way competency does. A contract can still be valid regardless of the financial status of the parties or their trustworthiness, as long as competency criteria are met.