What term describes an agreement created by two or more parties that establishes obligations?

The term that describes an agreement created by two or more parties that establishes obligations is "Contract." A contract is a legally enforceable agreement that outlines the terms and conditions of the relationship between the involved parties. It typically involves an offer, acceptance, and consideration, which means there must be something of value exchanged between the parties involved.

Contracts can take many forms, including written documents or verbal agreements; however, for many purposes, particularly in the context of formal legal dealings, written contracts are preferred as they provide clear evidence of the agreed-upon terms. The obligations established in a contract can include duties to perform services, provide goods, or make payments, and failure to fulfill these obligations can result in legal consequences or the need for enforcement of terms through the judicial system.

In contrast, the other terms such as "Obligation," "Commitment," and "Understanding" may relate to agreements but do not encapsulate the full legal framework and enforceability that a contract does. "Obligation" refers to a duty that one party has to another but does not imply a mutual agreement. "Commitment" suggests a promise to do something but lacks the specificity and legal binding nature of a contract. "Understanding" can describe a mutual agreement in a more