Which of the following statements is true concerning valid contracts?

The statement regarding the competence of parties being essential for valid contracts is indeed true. Competence refers to the legal ability of the parties to enter into a contract, meaning that they must have the capacity to understand the terms and implications of the agreement they are making. This includes factors such as age, mental capacity, and sobriety. If one of the parties is deemed incompetent — for instance, if they are a minor, mentally incapacitated, or intoxicated — the contract may be declared void or voidable.

Understanding the importance of competence helps clarify why the other statements are not accurate. Not all contracts require a written format; while certain types of contracts, like real estate agreements, must be in writing to be enforceable, many can be valid even when verbal. Additionally, contracts can be bilateral (where both parties make promises) or unilateral (where one party makes a promise in exchange for an act); hence, not only bilateral contracts are considered valid. Lastly, consideration, or something of value exchanged between the parties, is a fundamental element of most contracts, though there are exceptions such as certain gift agreements, demonstrating that not all contracts can exist without consideration.