A legal contract must have what is called mutual intent to be bound. This involves a mutual understanding about the duties, rights and promises involved in the proposed relationship. Generally, a legal contract must also be a written document. However, at times the law allows unwritten agreements to be included in the meaning of the written agreement if it can be shown that the parties intended as much. Sometimes, a series of written materials can also constitute a legal document to evidence a business relationship. Beyond these so-called formation issues, the law also specifies that agreements be entered into in good faith and must be performed with reasonable diligence. When this does not occur, the parties may choose to mediate, arbitrate or litigate to resolve the dispute.

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