Contract

Contract, promise or agreement enforceable by law. Contracts are usually written, but they may be merely understood or oral. Some types of contracts, particularly for the sale of real estate or covering a long period of time, must be in writing. Even written contracts, however, often give rise to misunderstandings or disagreements that become the subject of lawsuits. A contract is a bargain between two or more persons, firms, or other organizations, in which there is an offer and an acceptance. Once the offer has been made and accepted, the law enforces the terms agreed to. A breach of contract occurs when either party to a contract fails to fulfill promises. The court will then award damages to the other party, usually in the form of a sum of money, sometimes equivalent to what the party has actually lost, or else according to terms specified in the contract.