A formal agreement or promise between two or more parties that is legally enforceable is a

• A. Covenant
• B. Agreement
• C. Understanding
• D. Contract

Answer: (D)

A contract is a formal promise between two or more parties that the law will enforce. For a promise to become a contract, there must be an offer and acceptance, something of value exchanged (consideration), and an intent to bind the parties, plus capacity and legality. These elements make the agreement enforceable in court if one side doesn’t uphold it. A covenant is a specific promise within a contract or deed about a particular obligation, not the overall nature of the agreement. An agreement can be a broader, possibly informal understanding that may not be legally binding. An understanding is even less formal and typically not enforceable. So the description that best fits is a contract.