A contract is a legally binding agreement that obligates two parties who agree to buy and sell goods. It is in effect a personal law written by you and your buyer that will govern your transactions. A contract can be spoken or written.
Spoken agreements are legally binding, however, there is much more room for misunderstandings.
A properly written contract spells out the details so that both parties clearly understand what the other intends and expects. That may seem obvious. However, if anything is unclear, get clarification. Many times, if there is a dispute, it is over the details. Most contracts are carried out very smoothly but once a dispute arises it is too late to say you didn't understand that part.