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What is a contract?

A contract consists of voluntary promises between competent parties to do, or not to do,
something, which the law will enforce. These are binding promises, which may be oral or written.
Depending on the situation, a contract could obligate someone even if he or she wants to call the deal
off before receiving anything from the other side. The details of the contract who, how, what, how
much, how many, when, etc. are called its provisions or terms.
In order for a promise to qualify as a contract, it has to be supported by the exchange of
something of value between the participants or parties. This something is called consideration.
Consideration is most often money, but can be some other bargained-for benefit or detriment (as
explained more fully below). The final qualification for a contract is that the subject of the promise
(including the consideration) may not be illegal.
Suppose that a friend agrees to buy your car for $1,000. That is the promise. You benefit by
getting the cash. Your friend benefits by getting the car. Since it is your car, the sale is legal, and you
and your friend have a contract.
It is common for the word "contract" to be used as a verb meaning "to enter into a contract."
We also speak of contractual relationships to refer to the whole of sometimes complex relationships,
which may comprise one or many contracts.