Contract Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Contract, written in plain English, along with examples of how it is used.

What is Contract?

Contract is an agreement, a promise, which is enforceable by law, between two or more parties to perform a specific job where there is offer and acceptence or act as per the agreement. The contract is enforceable by law only when it is in writing and it binds the parties.

History and Meaning of Contract

The concept of the contract has been around for centuries, with evidence of contracts being used in ancient civilizations such as Egypt and Mesopotamia. In medieval Europe, the development of trade led to the emergence of legal systems governing contracts. With the advent of the Industrial Revolution, the use of contracts became increasingly important in business and commerce.

A contract is an agreement between two or more parties that creates legally binding obligations. It can be written or oral, but written contracts are usually preferred because they provide a clear record of the agreement. The terms of a contract can include anything that is not illegal, and typically include the obligations of each party, timelines, payment terms, and the consequences of any breach.

Examples of Contract

  1. A contract between an employer and employee outlining the terms of the employment agreement, including compensation, benefits, and responsibilities.
  2. A contract between a landlord and tenant detailing the terms of the lease, such as rent, security deposit, and maintenance responsibilities.
  3. A contract between a buyer and seller of goods or services, specifying the quality, quantity, price, and delivery of the products.
  4. A contract between a client and lawyer, detailing the scope of legal services to be provided and the payment terms.
  5. A contract between two businesses for the supply of goods or services, including the terms of payment, delivery, warranties, and liabilities.

Legal Terms Similar to Contract

  1. Agreement: A broader term that refers to any kind of arrangement between two or more parties, whether or not it is legally binding.
  2. Offer and acceptance: The fundamental elements of a contract, where one party makes an offer and the other party accepts it.
  3. Consideration: Something of value that is exchanged between the parties as part of the contract, such as money, goods, or services.
  4. Breach: When one party fails to perform their obligations under the contract, it is said to be breached.
  5. Remedies: The available options for a party that has been harmed by a breach of contract, such as seeking damages, specific performance, or termination of the contract.