Commerce runs on enforceable promises. A contract is a legally binding agreement between two or more parties that creates mutual obligations enforceable by law.

Formation typically requires offer, acceptance, and consideration, along with capacity and a lawful purpose. Contracts may be written or oral, though some categories must be in writing under statute-of-frauds rules. Terms can be express or implied by conduct or law.

When a party breaches, courts may award damages or, less often, order specific performance. Well-drafted contracts allocate risk, define performance standards, and specify dispute-resolution methods. The law of contract remains the basic toolkit for ordering private transactions.

• Legally enforceable agreement creating obligations
• Requires offer, acceptance, and consideration in most cases
• May be written or oral subject to formalities
• Breaches remedied mainly through damages