What Is a Commercial Contract?

A commercial contract is a legally binding general contract that obligates one party to do something or to restrain from doing something.


Commercial contracts can be verbal or written; although verbal contracts are harder to enforce through law because they are not documented. They also can be formal or informal. They relate to any type of business activity including wages, hiring and employee safety.


A commercial contract is entered into by two parties. One party is typically requesting the other party to perform some specified activity. They are also used between two parties when one party is agreeing to restrain from doing a specified activity.



Commercial contracts state the terms of the arrangement including all important factors. If one party fails to live up to the agreement, a breach of contract occurs. This document is legally binding and therefore the party in breach may be taken to court to allow the court to enforce the agreement.



About the Author

Jennifer VanBaren started her professional online writing career in 2010. She taught college-level accounting, math and business classes for five years. Her writing highlights include publishing articles about music, business, gardening and home organization. She holds a Bachelor of Science in accounting and finance from St. Joseph's College in Rensselaer, Ind.