Contracts come in various forms and at various scales of magnitude. The principles underpinning all contracts are common. These include:
- an intention between two parties to create a binding agreement;
- an offer by one party that is accepted by the other party;
- the existence of consideration, that is a value paid for the commodity (not necessarily money);
- legal capacity to act (some contracts are limited by the status of a person such as a bankrupt or people under eighteen);
- genuine consent of the parties (no duress or misrepresentation); and
- legality of the agreement (for example, not in breach of any state or federal law).
The examples from industry sectors below show different types of contracts.
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