The legal implications of having a contract with another party depend on the type of agreement and the jurisdiction in which it is made. Generally speaking, contracts are legally binding documents that allow both parties to enter into an enforceable agreement which must be adhered to by both sides. Depending on the nature of the contract, certain terms may or may not be enforceable, such as penalty clauses for breach of contract. Additionally, there could also be remedies for damages resulting from any breach of contract, including restitution or injunctive relief (preventing further damage).
When entering into a contract with another party, all relevant laws should be considered and any specific provisions should be included based on applicable law. Furthermore, depending on your jurisdiction's laws governing contracts and agreements between two parties, you may need to have a lawyer review and draft your document prior to signing in order to ensure that it meets all applicable requirements. It is also important to note that verbal promises are generally not legally binding; therefore it is advisable that all contractual arrangements should always be established in writing so they can later serve as proof if necessary. Finally, some jurisdictions require contracts over certain values ($2k-$10k) or involving particular subject matters (real estate) to meet additional formalities like being written down or witnessed/signed by parties involved in order for them to hold up in court if needed.
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