Skip to main content
Find a Lawyer

Am Jur 2d - Contracts § 1

I. In General, A. Definitions, § 1 - Contract

A contract has been defined as an agreement to do, or refrain from doing, a particular thing,[1] upon a sufficient consideration.[2] Similarly, a "contract" has been defined as an agreement, obligation, or legal tie by which a party binds itself, or becomes bound, expressly or impliedly, to pay a sum of money or to perform or omit to do some certain act or thing.[3] Also, a "contract" has been defined as a private, voluntary allocation by which two or more parties distribute specific entitlements and obligations.[4] A "contract" is an agreement between two or more parties that creates obligations that are legally enforceable by the contracting parties.[5] A "contract" is an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.[6] A "contract" is an agreement by two or more parties whereby obligations are created, modified, or extinguished.[7]

A contract is an obligation which arises from actual agreement of the parties manifested by words, oral or written, or by conduct.[8] The term "contract" has been held to include every description or agreement or obligation, whether verbal or written, by which one party becomes bound to another to pay a sum of money or to perform or omit to do a certain act.[9]

The Restatement defines the term "contract" as a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty,[10] and this definition has been adopted by some courts.[11] However, this has been criticized as a circular definition: it is the same as saying that a contract is a legally enforceable promise, but a promise is legally enforceable only if it is a contract.[12]

A contract is not a law, nor does it make law: it is the agreement plus the law that makes the ordinary contract an enforceable obligation.[13]


The following types of contracts are subject in some respects to special rules that depend on their formal characteristics and differ from those governing contracts in general:[14]

  • contracts under seal

  • recognizances

  • negotiable instruments and documents

  • letters of credit

When used in its ordinary sense, the term "contract" implies enforceable obligations.[15] However, in popular speech, the word "contract" is frequently used as meaning the work done under a contract.[16]


A contract is a verbal act that has a legal reality independent of the truth of any statement contained in it.[17]

The right to perform a contract and to receive its profits and the right to performance by the other party are property rights entitling each party to the fulfillment of the contract by performance.[18]

Under the Uniform Electronic Transactions Act, the term "contract" means the total legal obligation resulting from the parties' agreement as affected by the act and other applicable law.[19]

The term "contract" has a more specific and extended meaning than the terms "promise" or "agreement."[20] The existence of a contract is a question of fact.[21] Tallies or receipts[22] and invoices[23] are generally not contracts.

All case links go to Westlaw and require login.

1   Sims v. Bayside Capital, Inc., 327 Ga. App. 47, 755 S.E.2d 520 (2014) , cert. denied, (Sept. 8, 2014); J. B. Preston Co. v. Funkhouser, 261 N.Y. 140, 184 N.E. 737, 87 A.L.R. 459 (1933) , judgment aff'd, 290 U.S. 163, 54 S. Ct. 134, 78 L. Ed. 243 (1933) ; Mtge. Network, Inc. v. Ameribanc Mtge. Lending, L.L.C., 177 Ohio App. 3d 733, 2008-Ohio-4112, 895 N.E.2d 917 (10th Dist. Franklin County 2008) ; Gomes v. Hameed, 2008 OK 3, 184 P.3d 479 (Okla. 2008) .
 As to the definition of "agreement" under the Uniform Commercial Code, see Am. Jur. 2d, Commercial Code § 6 .

2   McCraw v. Llewellyn, 256 N.C. 213, 123 S.E.2d 575, 94 A.L.R.2d 914 (1962) .
 As to the necessity and sufficiency of consideration, generally, see §§ 101 to 162 .

3   Society of Roman Catholic Church of Diocese of Lafayette, Inc. v. Interstate Fire & Cas. Co., 126 F.3d 727, 47 Fed. R. Evid. Serv. 1406 (5th Cir. 1997) (applying Louisiana law) ; Kosmicki v. State, 264 Neb. 887, 652 N.W.2d 883 (2002) .

4   New Welton Homes v. Eckman, 830 N.E.2d 32 (Ind. 2005) .

5   West v. Shelby County Healthcare Corporation, 459 S.W.3d 33 (Tenn. 2014) .

6   Paris v. Faith Properties, Inc., 766 F. Supp. 2d 877, 267 Ed. Law Rep. 629 (N.D. Ind. 2011) (applying Indiana law) ; West American Ins. Co. v. Cates, 865 N.E.2d 1016 (Ind. Ct. App. 2007) .

7   Worley v. Chandler, 7 So. 3d 38 (La. Ct. App. 2d Cir. 2009) .

8   Armstrong v. Collins, 366 S.C. 204, 621 S.E.2d 368 (Ct. App. 2005) .

9   Terex Corp. v. Grim Welding Co., 58 Ohio App. 3d 80, 568 N.E.2d 739 (9th Dist. Summit County 1989) .

10   Restatement Second, Contracts § 1 .

11   Lempert v. Rice, 956 F. Supp. 2d 17 (D.D.C. 2013) , appeal dismissed, 618 Fed. Appx. 3 (D.C. Cir. 2015) , cert. denied, 136 S. Ct. 1465 (2016) (applying District of Columbia law) ; Willamette Management Associates, Inc. v. Palczynski, 134 Conn. App. 58, 38 A.3d 1212 (2012) ; Wellington Co., Inc. Profit Sharing Plan and Trust v. Shakiba, 180 Md. App. 576, 952 A.2d 328 (2008) ; D.T. v. St. Gabriel Consol. School, 2016-Ohio-784, 2016 WL 817040 (Ohio Ct. App. 1st Dist. Hamilton County 2016); Forest Glen Condominium Ass'n v. Forest Green Common Ltd. Partnership, 2006 PA Super 99, 900 A.2d 859 (2006) .

12   Baehr v. Penn-O-Tex Oil Corp., 258 Minn. 533, 104 N.W.2d 661 (1960) .

13   Cederstrand v. Lutheran Brotherhood, 263 Minn. 520, 117 N.W.2d 213 (1962) .

14   Restatement Second, Contracts § 6 .
 As to contracts under seal, generally, see Am. Jur. 2d, Seals §§ 1 et seq.
 As to recognizances, generally, see Am. Jur. 2d, Bail and Recognizance §§ 1 et seq.
 As to negotiable instruments and documents, generally, see Am. Jur. 2d, Bills and Notes §§ 1 et seq.
 As to letters of credit, generally, see Am. Jur. 2d, Letters of Credit §§ 1 et seq.

15   Plains Cotton Co-op. Ass'n v. Wolf, 553 S.W.2d 800 (Tex. Civ. App. Amarillo 1977) , writ refused n.r.e., (Jan. 11, 1978).

16   Independent Bridge Co., for Use of Ainsley v. Aetna Casualty & Surety Co., 316 Pa. 266, 175 A. 644, 96 A.L.R. 549 (1934) .

17   Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527, 40 Fed. R. Evid. Serv. 266 (5th Cir. 1994) .
 As to evidentiary rules concerning verbal acts, see Am. Jur. 2d, Evidence § 675 .

18   McDermott v. McDermott, 336 Ark. 557, 986 S.W.2d 843 (1999) .

19   Unif. Electronic Transactions Act § 2(4) .

20   Hanlon v. Hayes, 404 Ill. 362, 89 N.E.2d 51, 23 A.L.R.2d 154 (1949) .
 As to the definition of "promise," see § 3 .
 As to the definition of "agreement," see § 2 .

21   Master Palletizer Systems, Inc. v. T.S. Ragsdale Co., Inc., 725 F. Supp. 1525, 11 U.C.C. Rep. Serv. 2d 1125 (D. Colo. 1989) , aff'd, 937 F.2d 616 (10th Cir. 1991) (applying Colorado law) .

22   Agway, Inc. v. Brooks, 173 Vt. 259, 790 A.2d 438 (2001) .

23   In re C.W. Mining Co., 531 B.R. 862 (D. Utah 2015) .

Read this complete Am Jur 2d section on Westlaw

FindLaw’s hosted excerpts from American Jurisprudence 2d are provided courtesy of the publisher of American Jurisprudence 2d, the industry-leading legal encyclopedia offering unparalleled breadth of coverage of all fields of American law. For full access to American Jurisprudence 2d, including annotations and citations, please visit your local law library or visit Am Jur 2d on Thomson Reuters Westlaw.

FindLaw’s hosted version of American Jurisprudence 2d may not reflect the most recent law. Please verify the status of the section you are researching at your local law library or via Westlaw before relying on it for your legal needs.

Copied to clipboard