Formal agreements are written documents that outline the terms and conditions of a relationship or transaction between two or more parties. These agreements can cover various topics, such as business deals, employment contracts, or rental agreements. By clearly stating the expectations and responsibilities of each party, formal agreements help prevent misunderstandings and disputes in the future. In a formal agreement, important details like deadlines, payment amounts, and specific obligations are included. Both parties typically sign the document to show their consent and commitment. This legal recognition ensures that the terms can be enforced, providing security and clarity for everyone involved in the arrangement.