Legal Definitions - real contract

A real contract is a type of agreement where the contract becomes legally binding and enforceable not just through the mutual consent of the parties involved, but specifically through the *delivery* or transfer of a physical item from one party to another. In essence, the contract is "realized" or brought into existence by the actual handing over of the thing itself. Until that physical item is delivered, the full contractual obligations may not arise.

Here are a few examples to illustrate this concept:

• Borrowing a Specialized Tool: Imagine you've agreed with a friend that they will lend you their specialized woodworking router for a weekend project. While you both verbally agreed to the loan, the "real contract" for the loan of the router (and your subsequent obligation to return it) doesn't fully form until your friend physically hands the router over to you. The act of delivery is what makes the agreement a binding real contract.

• Leaving Items at a Coat Check: When you attend an event and use a coat check service, you are entering into a real contract. The agreement for the coat check attendant to take possession of your coat, keep it safe, and return it to you is formed when you physically deliver your coat (and often receive a claim ticket). Until you hand over your coat, the service hasn't fully assumed the contractual obligation for its safekeeping.

• Pledging an Item for a Loan: Suppose you need a small, short-term loan and decide to use a valuable piece of jewelry as collateral at a pawn shop. The agreement for the loan, secured by your jewelry, becomes a "real contract" when you physically hand over the jewelry to the pawnbroker. The pawnbroker's obligation to hold the jewelry as security and provide the loan, and your obligation to repay the loan to reclaim your item, are solidified by the actual delivery of the jewelry.