Not every agreement constitutes a contract. A contract is a bilateral obligatory legal transaction that causes the creation of obligations and rights (and simultaneously establishes a commercial, contractual obligation). Therefore, a contract is the legal basis for the creation of mutual obligations and rights between the contracting parties.⁹ Because the valid conclusion of a contract results in the creation of obligations and rights, a contract (within the law of obligations) is classified as an obligatory legal transaction. A necessary condition for the valid conclusion of a contract is the mutual consent of both parties, which is why a contract is a bilateral (obligatory) legal transaction.¹⁰ Through their free mutual consent, the parties determine the content of contractual rights and obligations, as well as the modification and termination of the contract. Therefore, a contract is a legally binding agreement between two or more parties.¹¹

For a contractual relationship to be validly established, the contracting parties must agree on the essential elements of their mutual contractual relationship, such as the price and subject of sale in a sales contract.¹² The subject matter of the obligation is, therefore, the performance to which a party commits under the contract. By defining the performance or performances, the parties determine all essential, necessary components of their mutual (specific) contractual obligation.¹³

There are several types of contracts, including unilateral contracts (in which one party is the creditor and the other the debtor) and bilateral obligatory contracts (in which both parties are simultaneously creditors and debtors), onerous and gratuitous contracts, consensual and real contracts (requiring both consent and the delivery of an object), formal and informal contracts, as well as principal and ancillary contracts.¹⁴ In addition to contracts governed by the law of obligations, which are the focus of this work, there are other types of contracts dominated by non-obligatory elements, such as inheritance law contracts, employment contracts, arbitration agreements, and others.