Contracts are legally binding agreements between two or more parties that outline specific obligations, terms, and conditions that each side agrees to fulfill. They serve as the foundation for a wide array of relationships, ranging from business partnerships and employment agreements to property leases and service provisions. Typically written and signed documents, contracts specify the deliverables, timelines, payment arrangements, and any other stipulations that govern the interaction between the involved parties. While many contracts are formal and require legal review, some simpler agreements may be informal or even verbal, although these can be harder to enforce. The essence of a contract is the principle of mutual consent: all parties should understand the terms and voluntarily agree to them. Failure to adhere to the agreed terms—known as a breach of contract—can result in legal consequences, including fines, the requirement of corrective actions, or even the nullification of the contract. Contracts are vital to ensuring fairness, clarifying expectations, and providing a mechanism for dispute resolution.