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 South Dakota, as in most states, 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 must represent a bargained-for exchange, reflecting each party's agreement to provide something of value in return for the other's performance or promise. The terms of the contract must be sufficiently specific to be enforceable, meaning they clearly outline the obligations of each party. While contracts can be either written or oral, certain types of contracts must be in writing to be enforceable under the Statute of Frauds, such as contracts for the sale of real estate or agreements that cannot be performed within one year. In South Dakota, the use of the terms 'agreement' and 'contract' is indeed interchangeable, provided that the necessary legal elements are present. A document labeled as an 'agreement' will be as enforceable as one labeled as a 'contract' if it contains the requisite elements that constitute a contract under South Dakota law.