General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which of the following is NOT one of the four essential elements required to form a valid contract?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
The four essential elements of a contract are: agreement (offer and acceptance), competent parties, legal purpose (lawful objective), and consideration. A written or notarized document is NOT an essential element — oral contracts are generally enforceable (though insurance policies must be written), and notarization is never a contract requirement.
Why the other options are wrong
- A) Agreement — the meeting of the minds through offer and acceptance — is one of the four essential elements.
- B) Consideration — the thing of value each party exchanges (premium for the promise to pay) — is essential.
- D) Competent parties (legal capacity) and a legal purpose are essential elements of any valid contract.
Memory hook
Four ingredients: Offer, Acceptance, Consideration, Capacity + Legal purpose. Paper is a receipt, not an ingredient.