The following article is excerpted from West's Encyclopedia of American Law . Agreements between two or more persons that create an obligation to do, or refrain from doing, a particular thing. The purpose of a contract is to establish the agreement which the parties have made and to fix their rights and duties in accordance with that agreement. The courts must enforce a valid contract as it is made unless there are grounds that bar its enforcement.
Statutes prescribe and restrict the terms of a contract where the general public is affected.
The terms of an insurance contract which protect a common carrier are controlled by statute in order to safeguard the public by guaranteeing that there will be financial resources available to the public in the event of an accident. The courts cannot create a contract for the parties. When the parties have no express or implied agreement on the essential terms of a contract, there is no contract. Courts are only empowered to enforce contracts, not write them, for the parties. A contract, to be enforceable, must be a valid, subsisting contract between the parties.