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.

Contracts between governmental entities and contracts between private citizens or entities and governmental entities often have unique considerations such as the contracting or bidding process for government contracts and the governmental entity's legal liability for failing to meet its obligations under the terms of a contract (see the subtopic on sovereign immunity).

In New York, a contract is recognized as a legally binding agreement when it meets certain criteria. These criteria include the presence of an offer, acceptance of that offer, and consideration, which is the value exchanged between the parties. The terms of the contract must be clear enough to be enforceable. Contracts can be either written or oral, although 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. The term 'agreement' is indeed often used synonymously with 'contract,' and as long as the necessary legal elements are present, the document can be enforceable regardless of its label. When it comes to contracts involving governmental entities, there are additional considerations. For instance, there may be specific procurement processes and regulations that govern the bidding and formation of government contracts. Furthermore, sovereign immunity may limit the legal liability of governmental entities, although New York has waived its sovereign immunity to some extent under the Court of Claims Act, allowing it to be sued in certain circumstances.