A contract is an agreement between two or more people or entities (such as corporations or partnerships) in which there is consideration, or value of some kind paid in exchange for a service or anything of value. You can have a contract in which the parties simply mutually agree not to do certain things, which can constitute a valuable exchange in itself.

Certain oral contracts are enforceable, but the problem with oral contracts is the difficulty in proving up the details if one party disagrees with the other about what exactly the terms were. That is why contracts should be in writing, with each side in total agreement about what the contract says and what it means. Often this can only be accomplished if both parties have lawyers, and any contract involving a lot of money should only be entered into after everyone has had a chance to consult their own separate counsel. Contracts concerning the sale of real estate have to be in writing in order to be enforceable.