What is a legal binding agreement that creates an obligation courts enforce?

A legal binding agreement that creates an obligation courts enforce is known as a contract. A contract is defined as a deliberate arrangement between two or more parties that is enforceable by law. For a contract to be valid, it typically must include essential elements such as an offer, acceptance, consideration, and mutual consent among the parties involved.

Contracts can take many forms, including written agreements, verbal agreements, or implied agreements, but they become legally binding when recognized by the law. Courts can enforce these contracts and provide remedies, such as damages or specific performance, in the event of a breach. This enforceability is crucial as it ensures that parties can rely on the agreements they enter into and have legal recourse if those agreements are not honored.

Other options, such as a memorandum, may serve as notes or records but do not carry the same legal enforceability unless they meet the criteria of a contract. A verbal agreement, while it can be binding, is often harder to prove and enforce compared to a written contract, which is typically more straightforward to interpret in a legal context. A policy document refers to a formal statement of principles or practices, which, while important in specific contexts, typically does not establish obligations as a contract does.