A simple contract is a verbal agreement between 2 individuals or entities. The agreement may be written or oral. A contract details the transaction that is to occur between 2 parties. Such details include what goods or services are exchanged under a certain price or what promises are made under certain terms. A contract is binding among the individuals or parties involved. When one of the parties reneges on the promises made or cannot fulfill one of the terms enumerated, a breach of contract or breach of promise occurs.
Simple contracts are not necessarily formalized contracts. Given the literal title of a simple contract, it is a plain contract that does not necessarily entail court proceedings in order to make it binding, it is merely an agreed upon transaction by 2 parties. However, when a breach of contract occurs, it may be brought to the attention of a court of law. It is easier to prove that a breach of contract occurred if the simple contract was written. It becomes difficult to prove such a breach if the simple contract was orally agreed upon since no documentation can support it.
When a breach of contract is proven, the offended party may seek restitution or monetary damages from the party that reneged on the contract. This is done in order to provide some form of compensation for the losses or injuries suffered by the other party. A judge can award damages or restitution to the offended individual, and the damages will be commensurate to the injuries or losses suffered.