A contract is a legally enforceable agreement between two or more parties where each assumes a legal obligation that must be completed. Many aspects of daily life involve contracts, including buying property, applying for a car loan, signing employment-related paperwork, and agreeing to terms and conditions when buying products and services or using computer software.
Legal issues involving contracts arise most often when one party fails to perform the legal obligation it has agreed to do. When a party breaches a contract by failing to perform, the other party can often sue for money damages, or, in some limited cases, can ask the court to force the other party to perform as promised.
Contracts can also be the source of legal disputes when they are not written clearly. Parties who misunderstand the terms of their agreement may sue each other and have a court settle the argument. Additionally, when a company signs a contract and later goes out of business or is unable to fulfill its promises, the other party may have to pursue legal action in civil or bankruptcy court to obtain relief.