What are the four essential elements of a legal contract?

The four essential elements of a legal contract are agreement, consideration, competent parties, and legal purpose, which is what makes option B the correct answer.

Agreement refers to the mutual assent between the parties, typically documented as an offer by one party and acceptance by another. This is foundational as a contract requires that both sides understand and agree to the terms.

Consideration is the value that each party agrees to exchange, which can be money, services, or any other item of value. This element is crucial because it distinguishes a contract from a mere promise; without consideration, there is no enforceable contract.

Competent parties means that those entering the contract must have the legal ability to do so. This typically includes being of legal age and having the mental capacity to understand the contract's terms and implications.

Legal purpose indicates that the contract's objective must be lawful and not against public policy. Contracts that involve illegal acts are void and unenforceable.

While negotiation, acceptance, performance, and understanding are related concepts in the realm of contracts, they do not represent the fundamental elements necessary for a contract to be deemed legally binding. Therefore, the elements listed in option B accurately encapsulate what is required for a valid legal contract.