People have been making agreements between entities ever since there was a need for someone else to perform certain tasks. When an organization determines it needs or wants help with a task, it hires another entity. This can be an individual or a large multibillion-dollar company. When another entity is hired, there is a relationship created in the form of a contract where certain aspects of this relationship are understood. These items can be understood with a handshake or formally documented and agreed upon by the signature of both parties. This list of items can include the following:
Scope: "This is what I want done"
Start: "This is when I want you to start"
Duration: "This is how long I expect it to take once you start"
Payment: "This is how much I'm going to pay you when I am happy with your work"
Nonconformance: "This is what will happen if you do not perform as per the above requirements"