A contract is generally a written or spoken agreement between persons or entities that includes obligations for each party (mutual obligations or mutuality) and enough specific information to be enforceable by either party (specificity).
The elements of forming an enforceable contract are generally (1) an offer made; (2) acceptance of the offer; and (3) consideration given by each party for the other party’s performance of the agreement—such as money in exchange for products or services, or mutual promises exchanged—which is often referred to as the bargained-for exchange.
The word "agreement" is often used interchangeably with the word "contract," and a document labeled as an agreement (with the necessary legal elements included) is as enforceable as a document labeled as a contract.
In Texas, a contract is recognized as a legally binding agreement when it meets certain criteria. The essential elements for forming an enforceable contract in Texas include (1) an offer, (2) acceptance of that offer, and (3) consideration, which refers to something of value exchanged between the parties. This could be money, services, or mutual promises that constitute a bargained-for exchange. The contract must also have mutual obligations or mutuality, meaning that each party has agreed to undertake certain obligations, and specificity, which means the terms of the contract are clear enough to be enforced. In Texas, as in other jurisdictions, the terms 'agreement' and 'contract' are often used interchangeably, and the enforceability of the document does not depend on whether it is labeled as an 'agreement' or a 'contract' but rather on the presence of these legal elements. Both written and oral contracts can be enforceable, though certain types of contracts must be in writing to satisfy the Statute of Frauds.
