Parties to a contract are bound by the terms to which they have agreed, usually even if the contract appears to be improvident or a bad bargain, as long as it did not result from Fraud, duress, or Undue Influence. As a general rule, contracts by competent persons, equitably made, are valid and enforceable. It is the policy of the law to encourage the formation of contracts between competent parties for lawful objectives. The function of the court is to enforce agreements only if they exist and not to create them through the imposition of such terms as the court considers reasonable.

A contract, in order to be enforceable, must be a valid. Courts are only empowered to enforce contracts, not to write them, for the parties. When the parties have no express or implied agreement on the essential terms of a contract, there is no contract. The courts may not create a contract for the parties.

The terms of an insurance contract that protect a common carrier are controlled by statute in order to safeguard the public by guaranteeing that there will be financial resources available in the event of an accident.

Statutes prescribe and restrict the terms of a contract where the general public is affected. The courts must enforce a valid contract as it is made, unless there are grounds that bar its enforcement. The purpose of a contract is to establish the agreement that the parties have made and to fix their rights and duties in accordance with that agreement. Agreements between two entities, creating an enforceable obligation to do, or to refrain from doing, a particular thing.

4 elements of a contract