What is defined as a legally binding agreement between two or more parties?

A legally binding agreement between two or more parties is defined as a contract. This term encompasses agreements that are enforceable by law, meaning that if one party fails to fulfill their obligations, the other party has the right to take legal action. Contracts are foundational to business transactions, as they outline the specific terms and conditions agreed upon by the involved parties, ensuring clarity and protecting the rights of each party.

While an offer represents an intention to enter into a contract, it does not become legally binding until accepted by the other party. A treaty typically refers to a formal agreement between sovereign states and is a specific type of contract with distinct legal implications in international law. A commitment generally describes a personal or moral obligation but lacks the formal legal enforceability associated with a contract. Therefore, the definition that most accurately captures a legally binding agreement in a business and legal context is a contract.