True or false: The intention to create a legal obligation is necessary for contract formation.

The intention to create a legal obligation is indeed essential for a contract to be formed. This principle signifies that both parties must enter into the agreement with a clear understanding and desire to be bound by the terms outlined. In legal contexts, this intention serves as a foundation for the enforceability of the contract.

It ensures that the parties are aware that they are entering a serious arrangement and are willing to accept the rights and responsibilities that come with that agreement. Without this intention, the contract may be viewed as non-binding or simply a social agreement, lacking the requisite seriousness needed for legal enforceability.

Various forms of contracts, whether oral or written, require this intention; therefore, it applies universally to all types of contracts, not just to written ones or under specific conditions of agreement.