What characterizes a contract?

A contract is characterized as a legally binding agreement between two or more parties that outlines the rights and obligations of each party involved. This means that the parties involved have mutually agreed to the terms of the contract and are legally obligated to adhere to those terms. If one party fails to fulfill their obligations, the other party has the right to seek legal remedies for breach of contract.

A legally binding agreement must meet certain criteria, including an offer, acceptance, consideration, capacity, and a lawful purpose. This framework ensures that the contract is enforceable by law, providing protection and clear recourse for the parties involved.

In contrast, a verbal agreement, while it may be an agreement, may not always be enforceable as a contract due to lack of written documentation and potential disinterest in the promises made. A promise made without consideration lacks the essential element of value exchanged, rendering it non-enforceable. A recommendation, on the other hand, does not constitute an agreement between parties but rather suggests a course of action, which does not carry the same legal weight as a contract.