What is a voluntary agreement between two competent parties called?

A voluntary agreement between two competent parties is best identified as a valid contract. This type of contract meets the essential criteria established by law for its enforceability. For an agreement to be considered valid, it must have several key elements: mutual consent, adequate consideration, legal purpose, and the capacity of the parties involved to enter into the agreement.

When both parties voluntarily agree to the terms and all necessary components of a valid contract are present, the agreement is enforceable in a court of law. This distinguishes it from other types of agreements, such as void contracts, which are not legally binding from the start, regardless of any intentions or agreements made. Additionally, an invalid contract lacks the necessary elements to be enforceable, while an unenforceable contract may have valid elements but cannot be enforced due to certain legal defenses or statutes.

Thus, recognizing a voluntary agreement between competent parties as a valid contract emphasizes the importance of the agreement being legally binding and enforceable, reflecting the principles of contractual obligations in the real estate industry.