For a contract to be legally binding it needs four elements: Offer (one party proposes terms), Acceptance (the other party agrees to those exact terms), Consideration (both parties exchange something of value — money, services, a promise), and Mutual Assent (both parties genuinely agree, not under duress or fraud). Verbal contracts can be legally binding but are much harder to prove. Written contracts are almost always better. Contracts for real estate, loans over $500, and agreements lasting more than 1 year must be in writing to be enforceable.

Arbitration is a private dispute resolution process outside the court system. Many contracts — employment agreements, credit cards, app terms of service — include mandatory arbitration clauses that require you to resolve disputes with an arbitrator instead of suing in court. The arbitrator (often chosen by the company) makes a binding decision. Class action lawsuits are usually prohibited. Studies show arbitration outcomes favor companies over consumers and employees. You often cannot opt out. Always read for arbitration clauses and understand what rights you are waiving.

Criminal law involves the government prosecuting someone for violating laws that protect society. The standard of proof is "beyond reasonable doubt." Penalties include prison, fines, probation. You have the right to a public defender if you cannot afford a lawyer. Civil law involves disputes between private parties — lawsuits over contracts, property, personal injury, divorce. The standard is "preponderance of evidence" (more likely than not). Penalties are usually money damages, not prison. You do not have the right to a free lawyer in civil cases.

Small claims court handles relatively small disputes without lawyers (usually). Limits vary: California $12,500, New York $10,000, Texas $20,000. To file: get the defendant's legal name and address, fill out a claim form at your courthouse or online, pay the filing fee ($30-$100), serve the defendant with notice, attend your hearing. Present your evidence: receipts, texts, photos, emails, witnesses. The judge decides same day or within a few weeks. If you win, collecting is a separate process — a judgment does not automatically mean payment.

A power of attorney (POA) is a legal document giving someone else the authority to make decisions on your behalf. A financial POA allows them to manage bank accounts, pay bills, sign contracts. A healthcare POA (also called healthcare proxy) allows them to make medical decisions if you cannot. A durable POA stays in effect if you become incapacitated. Everyone over 18 should have both types — especially before surgery or traveling internationally. You do not need a lawyer; many states provide free forms online. Two witnesses and a notary are usually required.