A contract is a legally binding agreement between two parties. It is a verbal or written agreement that outlines the terms and conditions to be followed by both parties. A contract can be used for various purposes such as employment, purchases, or services.

When a contract is signed, it becomes legally binding and enforceable by law. This means that both parties are bound by the terms of the contract and must fulfill their obligations as agreed upon. Failure to adhere to the terms of the contract can lead to legal action and financial penalties.

For a contract to be legally binding, it must meet certain criteria. First, both parties must have the capacity to enter into a contract. This means that they must be of legal age and have the mental capacity to understand the terms of the agreement.

Secondly, the agreement must be based on offer and acceptance. This means that one party makes an offer and the other party accepts the offer. Both parties must agree to the terms of the contract without any coercion or pressure.

Thirdly, the terms of the contract must be clear and unambiguous. There should be no confusion or misinterpretation of the terms by either party. The contract must clearly outline the responsibilities and obligations of each party.

Lastly, the contract must have consideration. This means that both parties must receive something of value in exchange for their obligations under the contract. This could be money, goods, or services.

Once all the criteria for a legally binding contract are met, it becomes enforceable by law. If there is any breach of the contract, either party can seek legal action to enforce the terms of the agreement or seek compensation for damages.

In conclusion, a contract is a legally binding agreement between two parties. It outlines the terms and conditions to be followed by both parties and becomes enforceable by law once signed. To ensure a contract is legally binding, it must meet certain criteria such as clear and unambiguous terms, offer and acceptance, capacity, and consideration.