What is the term for a legally binding agreement between two parties?

The term for a legally binding agreement between two parties is a contract. A contract is characterized by mutual consent, consideration, capacity, and legality, which together create an enforceable obligation. This means that if one party fails to fulfill their part of the agreement, the other party has legal grounds to seek remedies. Contracts are foundational to many transactions and relationships in law, serving to formalize the expectations and responsibilities of the involved parties.

Other terms like "agreement" are broader and do not necessarily imply legal enforceability. An "agreement" can exist without meeting all the criteria of a contract. Similarly, a "binding document" is too vague as it does not specifically denote the elements that constitute a contract. A "memorandum," often a note or written record, may summarize an agreement but may not inherently possess the legal enforceability associated with a contract. Thus, the precise definition and elements of a contract make it the correct choice for describing a legally binding agreement.