What is a key characteristic of a contract?

A key characteristic of a contract is that it requires legal enforcement. This means that a contract is not just a casual or informal agreement between parties; rather, it is a legally binding document that can be upheld and enforced in a court of law. This legal aspect provides security and assurance to the parties involved, as it stipulates their rights and obligations under the agreement. If one party fails to fulfill their obligations, the other party has the right to seek remedies through legal means.

The enforceability aspect distinguishes contracts from mere informal agreements or understandings, which may not carry legal weight. Contracts can be formalized in writing or verbally, but the essential element is that they are recognized by law, providing both parties with the ability to depend on the agreement and seek legal recourse if necessary. This structural importance of legal enforcement is foundational to understanding contracts in various legal and business contexts.