1.1What is a contract?
The essentials in 30 seconds
- Contract = agreement of wills creating obligations, with binding force: you cannot walk away just because you changed your mind.
- Validity ≠ evidence: a verbal agreement or conduct can form a contract; writing proves and secures.
- Validity: free and informed consent, capacity, lawful subject matter — within freedom of contract and good faith.
Threaded mini-case — Yacine commits before even signing
Yacine, digital SME owner in Algiers, replies to a prospect: “Agreed, I'll deliver the platform at this price on Monday” and the client answers “perfect”. On Monday, Yacine hesitates: nothing is signed — can he back out? His partner reminds him that the meeting of wills is often enough to form a contract — and that you are free before you promise. From then on, Yacine decides to always confirm in writing what is decided… or to state that nothing is decided until he has confirmed.
This case runs through the lesson, the diagram, the script and the 48h challenge — and continues in 1.2, 1.3, 1.4 and 1.5, where Yacine signs quotes, NDAs and general terms.
1. An agreement that binds
A contract is an agreement of wills intended to create obligations. Its force is summed up by “the contract is the law between the parties”: once concluded, it binds — this is its binding force. You cannot walk away from it just because you changed your mind.
A contract does not necessarily need to be signed: a verbal agreement or conduct (ordering, delivering, paying) can be enough. Writing is not always a condition of validity, but almost always of good evidence.
2. Conditions of validity
Generally required (with variations by country): free and informed consent (without coercion, deception/fraud or essential mistake), capacity, a lawful and defined subject matter, and sometimes a lawful cause/purpose.
Two frameworks: freedom of contract (within the limits of public policy) and good faith (fair dealing at every stage). A contract is serious business: understand before you sign.
🔎 Concrete example — 🔎 Concrete example — Bound without signing
The meeting of wills is often enough.
“Agreed, I order X at Y €” + “perfect, I deliver on Monday” = contract.
Conduct (ordering, paying) can also bind you.
→ but certain acts (real-estate sales, etc.) require writing to be valid.Result: you assess the extent of a commitment before taking it on.
Reflex: put important commitments in writing (evidence).
Section vocabulary
- Contract
- An agreement of wills between two or more persons intended to create obligations.
Simple example: Yacine accepts a client quote through an exchange of e-mails: a contract is formed.
What it is not: a mere exploratory discussion with no agreement on the essentials.
Reflex: ask “who undertakes what, towards whom, on what terms?”.
- Binding force
- Once validly concluded, the contract obliges the parties to honour it.
Simple example: Yacine cannot cancel his delivery on the sole grounds that he changed his mind.
What it is not: a general right to withdraw at any time.
Reflex: it is before signing that you are free.
- Free and informed consent
- Agreement given without coercion, deception or mistake about an essential element.
Simple example: Yacine checks the scope of the quote before accepting, without pressure.
What it is not: signing without reading, thinking “it must be standard”.
Reflex: do I have all the information? Am I rushed? Any doubt about the essentials?
- Reciprocal contract
- A contract in which each party undertakes obligations towards the other (mutual obligations).
Simple example: Yacine delivers the platform, the client pays the agreed price.
What it is not: a promise in which only one party would be bound.
Reflex: list what each party owes, not only what it receives.
- Good faith
- The requirement of fair dealing in negotiating, concluding and performing a contract.
Simple example: Yacine flags a deadline constraint instead of promising the impossible.
What it is not: hiding decisive information to obtain the signature.
Reflex: negotiate and perform as you would want the other side to.
In practice — In practice — Recognising and securing a contractual commitment
- Before committing, check that you understand WHO undertakes WHAT, towards whom, and on what terms.
- Make sure your consent is informed: do you have all the information? are you under pressure? any doubt about an essential point?
- Remember that a verbal agreement or conduct (ordering, paying) may already form a contract: commit consciously.
- Put important commitments in writing (evidence) and keep a record of the exchanges that preceded them.
Ready-to-use script — framing an agreement before it binds (30 s)
“To be clear: nothing is decided until I have confirmed in writing. I'll send you the quote tonight with scope, price and deadline — we commit on that written basis.”
Say before any decisive exchange: it stops a hasty oral remark from becoming a disputed contract.
Copy-paste template — securing a commitment
WHO COMMITS / TOWARDS WHOM: _______________
SUBJECT MATTER (what, how much, by when): _______________
INFORMED CONSENT (full information? pressure? doubt?): _______________
WRITTEN RECORD (dated e-mail / quote): _______________
POINT TO CHECK BEFORE PROMISING: _______________SME / independent
Even for a small order: confirm scope, price and deadline in writing before starting, otherwise oral words alone will count in a dispute.
SME Algiers
Yacine has each quote confirmed in writing in Algiers and keeps the exchanges: in a dispute, the record counts, not the memory of the call.
Sales team
Forbid salespeople from promising orally beyond the standard quote: any off-template promise goes back through the manager and a written record.
Pushy prospect
Faced with “reply yes quickly”: answer “agreed in principle, I'll confirm in writing tonight” rather than a yes that binds.
✓ Best practices
- Check that your consent is free and informed before committing.
- Remember that a verbal agreement or conduct may already bind you.
- Put important commitments in writing.
✗ Common pitfalls
- Believing “there is no contract unless I signed”.
- Committing without all the information (poorly informed consent).
- Thinking you can easily back out (binding force).
Key takeaways
- A contract is an agreement of wills creating obligations; it has BINDING FORCE (you cannot walk away from it just because you changed your mind).
- Writing is not always required for VALIDITY (oral agreements can suffice) but it almost always is for EVIDENCE.
- Conditions of validity (varying by country): free and informed consent, capacity, lawful subject matter (and sometimes a lawful cause/purpose).
- Frameworks: freedom of contract (within the limits of public policy) and good faith (fair dealing at every stage).
48h Challenge — apply tomorrow
Go back over 1 recent commitment (quote, oral promise): write down WHO owes WHAT, by when, and send a written confirmation to the other party. 15 minutes is enough.
- I can define a contract and its binding force.
- I distinguish validity (oral can suffice) from evidence (writing secures).
- I have confirmed 1 recent commitment in writing.
Frequently asked questions
If I signed nothing, am I really bound?
Often yes. The idea that “there is no contract unless I signed a paper” is wrong in many cases: a contract is formed as soon as there is a meeting of wills, whatever the medium. It can arise from a verbal agreement, an exchange of e-mails (“agreed, I order X” → “perfect, I deliver on Monday”), or conduct (ordering, being delivered to, paying). Many disputes arise from people convinced they “committed to nothing” for lack of a signature, while their words or acts had already bound them. Two nuances: certain contracts do require writing to be valid (real-estate sales, specific acts); and without a signature, the real problem is evidence. Hence the value of confirming in writing even when oral agreement suffices. Be explicit: say “nothing is decided until I have confirmed in writing”, or on the contrary formalise things properly.
I signed a contract but I regret it: can I easily withdraw?
In principle no — that is the meaning of binding force: regret alone is not enough to undo a validly concluded contract. There are ways out, but they are framed (and vary by country). A legal right of withdrawal exists in certain situations (often to protect consumers: distance purchases, doorstep selling) — but it is the exception, not the rule, and rarely between professionals. Annulment for defective consent (coercion, fraud, essential mistake) can cancel the contract, but “I had not read it properly” is not enough. The contract's own termination clauses often offer the most realistic way out. Finally, an amicable agreement (asking the other party to release you, sometimes for compensation). The real lesson: it is before signing that you are free. For a contract already signed, have your situation reviewed by a professional.
Can an unsigned contract bind you?