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 Indiana, as in most states, a contract is recognized as a legally binding agreement that can be written or oral, provided it contains the essential elements necessary for enforceability. These elements include an offer, acceptance of that offer, and consideration, which refers to something of value exchanged between the parties. The consideration must represent a bargained-for exchange, indicating that each party has provided something that induces the other to enter into the contract. Specificity is also important; the terms of the contract must be clear enough that the parties understand their obligations and that a court can enforce the agreement if necessary. While the terms 'agreement' and 'contract' can be used interchangeably, the enforceability of the document does not depend on its label but rather on the presence of the required legal elements. If these elements are present, the agreement, regardless of whether it is labeled as an 'agreement' or a 'contract,' can be enforced by the courts in Indiana.