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 Pennsylvania, a contract is recognized as a legally binding agreement when it contains the essential elements of (1) an offer, (2) acceptance of that offer, and (3) consideration, which is something of value exchanged between the parties. This consideration can be in the form of money, goods, services, or mutual promises. The contract must also be for a lawful purpose and entered into by parties who have the legal capacity to contract. Specificity is crucial for enforceability; the terms of the contract must be clear enough that a court can ascertain the obligations of each party. While contracts can be oral or written, certain types of contracts, such as those involving real estate or lasting more than one year, must be in writing to be enforceable under the Statute of Frauds. The terms 'agreement' and 'contract' are often used interchangeably, and the label of the document does not determine its enforceability; rather, it is the presence of the necessary legal elements that makes an agreement a contract under Pennsylvania law.