The importance of a contract is not only to hold someone to an agreement but is considered part of any professional agreement that is done to protect both sides. Presenting a potential client with a contract affords you both a chance to understand and state just what the terms are going to be and set it clearly. A contract also states that this is a sincere agreement and should get rid of anyone who is not truly willing to do business. Contracts can be used to prove and disprove that work was intended to be done, and can be the difference between battling out a dispute in court or simply proving that you were in the right by showing this legal document. There are two types of contracts, formal and simple.
Formal contracts refer to written agreements, while simple is typically a verbal agreement.
Contracts may either be performed by each side, or party, and is referred to as bilateral. Many deals for service or sale of a product are considered unilateral contracts, because one side performs a promise for the other. Legal contracts have these fundamental elements, described below. The offer is made either in writing or verbally and the terms are decided at the time. It is specific and detailed.