Simulated Contract Law and Legal Definition

Simulated contract, in Civil law, is a contract that, by mutual agreement, does not express the true intent of the parties. A simulated contract is absolute when the parties intend that the contract will impose no obligations. Such a contract cannot enforce any obligations on the parties. However, if the parties intend a simulated contract to impose obligations which are different from the ones stated in the contract, then the simulated contract is relative. The intended obligations are enforceable if all relevant conditions are met. This contract is also termed as simulation.