A legal agreement between two or more parties, specifying the actions to be taken and payments to be made by each party. A contract may also specify how any dispute over its interpretation will be resolved, by arbitration or legal action. A contract of employment is a contract between an employer and a worker specifying the work to be performed by the employee and the payments and working conditions to be provided by the employer. Contracts may be contingent, that is, may stipulate that actions shall be taken only in specific circumstances, as for example in insurance policies. The terms permitted in legally enforceable contracts are governed by legislation. In many cases possible variations in circumstances are so complex, or are so difficult to verify objectively, that a completely specified contract is impossible or too inconveniently complicated. In such cases an implicit contract is an unwritten or only partially written understanding between two parties as to how each will behave as circumstances vary.

See also:

forward contract, futures contract, implicit contract, and service contract

• Exchange Equalization Account
• exchange rate
• exchange rate bands
• Exchange Rate Mechanism
• exchange rate regime
• exchange restrictions
• excise duty
• exclusion
• exclusive dealing
• ex dividend
• executive, chief
• exercise price
• exhaustible resources
• Eximbank
• exit
• exit, freedom of
• exit price
• exogenous expectations
• expectations
• expectations-augmented Phillips curve
• expectations, model-consistent
• expected inflation
• expected utility
• expected value
• expenditure