# Contract

## Definition

A formal agreement between parties that establishes mutual obligations and rights, which Smith notes is uniquely human as animals do not engage in contractual arrangements, marking a fundamental distinction between human and animal economic behaviour.

## Source Chapter

Book I, Chapter 2

## Context

Smith uses the absence of contracts in animal behaviour to illustrate that the propensity to truck, barter, and exchange is uniquely human, distinguishing human economic organisation from animal interactions.

## Economic Domain

Exchange

---