Freedom of Contract Law and Legal Definition

The doctrine which states that people have the right to legally bind them is known as freedom of contract. Freedom of contract is a judicial concept which holds that contracts are based on mutual agreement and free choice. Therefore, contracts are not be hampered by external control such as governmental interference. This is the principle which supports that people are able to fashion their relations by private agreements, when opposed to the assigned roles of the feudal system.

Freedom of contract embraces two closely connected, but two different concepts. Firstly, it indicates that contracts were based on mutual agreement. Secondly, it emphasizes that the creation of a contract was the result of a free choice unhampered by external control including the government or the legislature.