Pennsylvania Title Insurance Practice Test 2025 - Free Title Insurance Practice Questions and Study Guide

The correct choice indicates that contracts must have a legal purpose to be enforceable in a court of law. When a contract is formed for illegal or immoral acts, such as drug trafficking or fraud, it does not meet the requirement of legal purpose, thereby rendering it invalid. Courts will not enforce agreements that violate public policy or statutory laws because doing so would undermine the legal system and societal values.

Contracts that are enforceable typically involve legitimate activities and comply with relevant laws. Implied contracts, on the other hand, arise from actions or circumstances rather than specific agreements, and thus they too must adhere to legal purposes. Contracts of adhesion are those drafted by one party, often with the other party having little bargaining power, but these contracts are valid unless they concern illegal matters. All these contract types must ultimately conform to the requirement of legality; otherwise, they would be unenforceable.