Basic Contract Definition

In its simplest form, a contract is an agreement between two or more parties that creates obligations that are enforceable by law. Contracts are usually written, but they can also be oral. A contract can be as simple as a handshake or as complicated as a multi-page document.

There are four basic elements that must be present for a contract to be valid: offer, acceptance, consideration, and intention to create legal relations. An offer is an expression of willingness to enter into a contractual agreement, made with the intention that it will become binding if accepted by the other party. An acceptance is an unequivocal assent to the terms of an offer. Consideration is something of value given by each party to the other, which induces them to enter into the contract. And finally, there must be an intention to create legal relations, meaning that the parties intend for the agreement to be legally binding and enforceable.