Contract

Broadly speaking, a contract is an agreement between two entities, which may or may not be written. In finance and real estate, the contract is a legal document through which buyers and sellers make offers to the other party. Also called the purchase agreement or agreement for sale, the contract binds both parties to stick to its terms and sets penalties or remedies in case one of them fails to comply. Contracts are legally enforceable, which means they are governed by the law and legal penalties can be imposed when necessary.