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What constitutes contract and what constitutes agreement. A valid contract is which of all essential components which present and in which the court would enforce as a legally binding promise.hat constitutes contract and what constitutes agreement. A valid contract is which of all essential components which present and in which the court would enforce as a legally binding promise.
The law says to make a legally binding contract you need: 1  Agreement-an offer is made by one person and freely accepted by another. 2  Consideration-this means that you and each person entering the contract must promise to do something or give something of value (money, right or benefit) to each other. contract is a legally binding agreement between two or more people. A contract can also be made with a business. Some examples of contracts are: 1  buying goods. 2  buying a house. 3  hiring a tradesperson to do some work for you. 4  borrowing money. 5  signing up for a telephone plan.