A contract is a binding promise or group of promises made by parties seeking to offer something of value. The promises are offers and acceptances, depending on the terms agreed upon by each party. The something of value is termed consideration. There is a legal obligation to carry out the terms of the contract and the contract may be subject to liability in the event of contract non-performance.
Contract formation begins with the willingness of one party to extend an offer of a binding agreement. An acceptance is a statement agreeing to the terms of the offer. When the contract is formally accepted, the parties enter into a legally binding relationship. When the parties agree to exchange consideration or something of value then the contract becomes valid.
Implied contracts are legally enforceable by the terms of conduct between the contractual parties. Contractual parties may enter into a verbal agreement referred to as an oral contract because it is not in writing. Written contracts document the obligations of the parties and the agreed upon consideration. Some types of agreements are legally required to be in written form.