How is a ‘contract’ defined in legal terms?

A ‘contract’ is legally defined as a binding agreement between two or more parties. This definition captures the essence of what constitutes a contract: it requires that the parties involved have a clear understanding of the agreement, with specific terms and mutual consent. A contract is enforceable in a court of law, establishing legally recognized rights and obligations for the parties involved.

To create a valid contract, certain elements must be present, including an offer, acceptance, consideration (something of value exchanged), and the intention to create legal relations. The enforceability stems from the clear agreement between the parties, rather than the format or medium used to convey the contract. This is why options like an informal understanding or a promise made without consideration do not qualify as contracts, as they lack the essential components that establish enforceable agreements. Similarly, stating that a contract must be a legal document only enforceable in writing misrepresents legal principles since many contracts can be verbal or implied, as long as they meet the required elements.