A legally enforceable agreement between individuals or entities. In real estate, an exchange of contracts accompanied by payment of the deposit is a binding commitment to buy and sell. An employment contract guarantees remuneration, conditions and length of service. In futures markets, a contract is the unit of a commodity traded on the futures exchange, for example a bank-bill futures contract is $A500 000 face value of bank bills of exchange. The contract is a bilateral agreement between buyer and seller, defined as a 'standardised agreement to buy or sell commodities or securities at a date in the future, at a price agreed today'. See also: futures, hedge market.
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