Question

Aaron and Donald sign a written contract in which Aaron agrees to supply raw materials to Donald’s company in return for set fees for one year. Which form of contract have both the individuals entered into?

Answer 1

Aaron and Donald have entered into a Mutual Contract.

A Mutual contract is one where, each party to the contract has to perform a specific, pre-agreed action, to complete the contract successfully. Mutual contracts are binding on both the parties and either party may claim damages, for non-fulfilment of contract.  

In this case, Aaron has to supply raw materials to Donald’s company and Donald has to make payment to Aaron, as per their mutual agreement.