Contracts

Contracts are an important institution to provide social order in modern societies. They are applied in the economy but also in politics, administration, and private life. Contracts are definedas promises about a future. They comprise, for instance, exchanges of services and goods, future states, relationships, obligations, and opportunities. However, contracts, in contrast to promises, are not just moral obligations but are legally binding.

Economic contracts feature different traits from political ones. According to Brian Blum, an economic contract is defined as a relationship of exchange. Its foundation is a promise in terms of an agreement between at least two persons. The agreement can be written or oral. Because of its legal status, it is enforceable. But to be legally binding, two requirements must be fulfilled: (1) ...