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Contracts. This paper discusses contracts and their importance. A contract exists when two parties agree to exchange property, money or service. It is an agreement to do or not to do something. An agreement is, therefore, the most important prerequisite of a contract, whereby the parties assent mutually to the terms of the agreement or understanding. It is a promise made by the parties to each other (Legal Information Institute). Contracts, at times, are used interchangeably with covenant and stipulation, but not every agreement is a contract: only agreements, which are legally enforceable are considered contracts.
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