A contract is a legally binding agreement involving two or more parties that sets forth an exchange of promises of what each party will or will not do. A contract requires two competent parties to have a meeting of the minds where there is (i) an offer by one party, (ii) an acceptance of that offer by the other party, and (iii) the consideration for the mutual promises must be something of value. The exchange can be goods or services and can be of virtually any amount, even very small. Most contracts that can be completed within one year can be oral as well as written. Exceptions exist (see statute of frauds) that require a contract to be in a signed writing, such as those involving parcels of real estate, commercial goods with a value of $500, a suretyship agreement and others. Contracts require the essential terms of the agreement also be stated in the offer, such as the price, time for performance and any other essential terms and conditions. A promise to sell roses to another person without a price would not constitute a valid agreement as essential terms were not agreed upon there was no meeting of the minds for a contract to have been recognized. Consideration exchanged can be a promise to provide something (money) or to refrain from something (smoking in a home.)
Law Dictionary – Alternative Legal Definition
An agreement, upon sufficient consideration, to do or not to do a particular thing. 2 Bl. Comm. 442; 2 Kent, Comm. 449. Justice v. Lang, 42 N. Y. 496, 1 Am. Rep. 576; Edwards v. Kearzey, 96 U. S. 599, 24 L. Ed. 793; Canterberry v. Miller, 76 111. 355. A covenant or agreement between two or more persons, with a lawful consideration or cause. Jacob. A deliberate engagement between competent parties, upon a legal consideration, to do, or abstain from doing, some act Wharton. A contract or agreement is either where a promise is made on one side and assented to on the other; or where two or more persons enter into engagement with each other by a promise on either side. 2 Steph. Comm. 54. A contract is an agreement by which one person obligates himself to another to give, to do, or permit, or not to do, something expressed or implied by such agreement Civ. Code La. art. 1761; Flsk v. Police Jury, 34 La. Ann. 45. A contract is an agreement to do or not to do a certain thing. Civ. Code Cal.