An investment contract is an agreement between two or more parties that details a financial transaction involving an “investment of money with consensus expectations of profit.” The purpose of the investment contract varies depending on its type, such as investing for capital gains, purchasing bonds, or taking part in a hedge fund. Generally, the contract outlines what is expected from both the investor and the company, including mutual responsibilities and benefits. In order to be profitable and successful, investors need to understand their rights and responsibilities detailed in the contract before entering into any agreement.