Final answer:
A contract is a legally binding agreement between parties, setting out their duties and rights. A social contract is an implied agreement where individuals grant authority to a governing entity. Contractual rights enable agreements that, when enforced by law, underpin economic stability and growth.
Step-by-step explanation:
A contract is a legally binding agreement between two or more parties that outlines specific rights and obligations each party agrees to fulfill. In everyday transactions like employment contracts, parties consent to terms such as salary, responsibilities, and benefits, which are enshrined in legal documentation. Similarly, a social contract is a theoretical framework explaining how governments arise, which suggests individuals collectively give up certain freedoms and delegate authority to a state entity to maintain order and provide public goods. Without such agreements and the enforcement of contractual rights by a legal system, economic activity and growth could be severely hampered due to the risk of non-compliance in transactions.