An investment contract is a legal agreement where one party invests money in a common enterprise with the expectation of profits primarily from the efforts of others. This type of contract often involves securities, which are financial instruments that represent ownership or a claim on assets. Investment contracts are typically regulated by government agencies, such as the Securities and Exchange Commission (SEC) in the United States, to protect investors from fraud. They must meet specific criteria to be considered valid, ensuring that investors are informed about the risks and potential returns associated with their investments.