Formal Contract

In one sentence

A contract that requires specific formalities, such as a seal, notarization, or written form, to be enforceable.

Plain English

A formal contract is one where the law requires certain procedures or documents to make it binding. For example, a deed for real estate must be in writing and often notarized. A formal contract might need a seal (a special mark showing it's official) or must follow a particular format. These requirements exist to make sure people understand the seriousness of what they're agreeing to and to prevent fraud.

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Example

To sell a house, you must use a formal contract—a written deed that is notarized and recorded with the county. You cannot buy or sell real estate with just a handshake or a casual email, no matter how clear the terms are.

Used in a sentence

“The will was a formal contract that required the testator's signature and two witnesses to be valid.”

Related terms

Capacity

The legal and mental ability to enter into a binding contract.

Mutual Assent

Both parties agree to the same contract terms at the same time.

Performance

The act of doing what a contract requires, such as delivering goods or paying money.

Good Faith and Fair Dealing

A legal duty to act honestly and fairly when making and performing contracts.

Unenforceable

A contract or clause that a court will not force either party to follow, even though it appears valid.

Executed

A contract in which both parties have fully performed all their obligations.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.