But what is a contract? In the simplest terms a contract is a mutual exchange of promises. The seller promises to supply goods or services and the buyer promises to pay. If certain criteria are satisfied, this exchange of promises can be enforced in a court of law. As the court has said, Contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice . This ancient statement not only captures the principle of legal enforcement but also illustrates, in its use of the phrase freely and voluntarily , a fundamental tenet of English law that contracts are made freely and not in terrorem . This means that neither party may be forced into a contract or forced to perform a contract by threat. Amongst other things, this tells us that penalty terms in contracts are not enforceable, but as the text will show later, one man's penalty is another man's incentive! So contracts may not be made or carried out by force from the parties. However, a court may enforce a contract, meaning that it will require a defaulting party to perform, or failing such performance the court will allow the injured party certain remedies. But this is to jump ahead; to begin with we first need some principles.